Sempra Energy announced that it has entered into an agreement to sell its equity interests in its Chilean businesses, including its 100% stake in Chilquinta Energía S.A. (Chilquinta Energía), to State Grid International Development Limited (SGID). Sempra Energy's interests will be sold for $2.23 billion in cash, subject to adjustments for working capital and net indebtedness and other adjustments. The sale also will include Sempra Energy's 100% interest in Tecnored S.A., which provides electric construction and infrastructure services to Chilquinta Energía and third parties, and its 50% interest in Eletrans S.A., which owns, constructs, operates and maintains power transmission facilities.
"This agreement is really important. It moves our company one step closer to completing the sale of our South American businesses and concentrating our investment strategy right here in North America," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "All of our companies in Chile, including Chilquinta Energía and Tecnored S.A., are excellent businesses with a strong focus on safety, reliability and customer service. We are so appreciative of the hard work and dedication of our Chilean team over the past 20 years."
Chilquinta Energía signed an agreement to purchase the remaining 50% interest in Eletrans S.A. from Sociedad Austral de Electricidad S.A. Closing of this transaction, which will enable Sempra Energy to transfer 100% ownership of Eletrans S.A. to SGID, is contingent on the closing of the sale of Sempra Energy's Chilean businesses and will not change the economics of the transaction for Sempra Energy.
The sale to SGID is expected to be completed in the first quarter of 2020, subject to customary closing conditions, including approval by the Chilean anti-trust authority, certain Chinese regulatory approvals and approval by the Bermuda Monetary Authority.
Today's announcement follows Sempra Energy's agreement to sell its equity interests in its Peruvian business, including its 83.6% stake in Luz del Sur S.A.A., to China Yangtze Power International (Hongkong) Co., Limited. That sale, which was announced in September, is also expected to be completed in the first quarter of 2020, subject to customary closing conditions, including approval by the Peruvian anti-trust authority and the Bermuda Monetary Authority.
In combination, these transactions would conclude Sempra Energy's planned sale of its South American businesses for combined proceeds of approximately $5.82 billion in cash, subject to adjustments and satisfaction of their closing conditions.
"Proceeds from both of these transactions will be used to advance our business strategy by strengthening our company's balance sheet and supporting the growing capital needs of our utilities in California and Texas," said Martin.
Read the press release for more information.