Enel agrees to sell Peruvian assets to a Chinese state-owned company for US$2.9 billion

By Alberto Brambilla, Danele Lepido and Paola Villar S.

Enel SpA agreed with China Southern Power Grid Co. to sell its distribution operations in Peru, a move aimed at cutting debt for Italy’s largest utility.

Specifically, the deal is worth about US$2.9 billion, the Italian company said Friday, confirming a Bloomberg News report.

The enterprise value of the assets was pegged at about US$4 billion.

The asset sale is expected to reduce Enel’s consolidated net debt of about €3.1 billion in 2023 and positively impact the group’s reported net income of about €500 million, according to the statement.

The transaction is in line with Enel’s current strategic plan, which calls for the completion of the repositioning “focusing on six core countries,” Enel said in a statement.

In an ‘important fact’ published in the Superintendencia del Mercado de Valores (SMV) of Peru, Enel Distribución informed that its parent company Enel Américas posted the agreement to sell to China Southern Power Grid International Co. Ltd., all the shares owned by Enel Distribución Perú, equivalent to 83.15% of its capital stock and also all the shares of Enel X Perú S.A.C., equivalent to 100% of its capital stock.

In March, Enel had already indicated that it was confident that the process of selling its assets in Peru would be completed before the first half of 2023, in line with the due diligence processes that were already being carried out with China Southern Power Grid International for the sale and purchase process.

Enel Distribución Perú commented in the important fact published in the SMV that the transfer process of the shares owned by the company in Peru is subject to “certain suspensive conditions usual for this type of operations.”

Among them, the approval by the National Institute for the Defense of Competition and Protection of Intellectual Property (Indecopi), the Peruvian authority that oversees acquisitions and mergers at the national level, and the approval of the Chinese authorities responsible for outbound direct investment (OID).

“The acquisition will be made directly to Enel Peru.”

“However, the buyer will have to make, concerning Enel Distribución Perú S.A.A., a takeover bid (OPA) by Peruvian law.”

“The purchase price amounts to the total amount of approximately US$2.9 billion, equivalent to an enterprise value of approximately US$4 billion, based on 100% of the value of the companies subject to the purchase,” Enel Distribución Perú said in its press release.

With information from Bloomberg

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