Sempra Energy said this week it’s selling its equity interests in its Peruvian businesses, including its 83.6% stake in electric utility Luz del Sur S.A.A. (Luz del Sur), to China Yangtze Power International Company Ltd. (CYP), for $3.59 billion in cash.
The sale will also include Sempra’s interest in Tecsur S.A., which provides electric construction and infrastructure services to Luz del Sur and third parties, and Inland Energy S.A.C., Luz del Sur’s generation business, Kallanish Energy learns.
“Proceeds from this transaction will be used to strengthen our balance sheet and meet the growing capital needs of our core utilities in California and Texas,” said Jeffrey W. Martin, chairman and CEO of Sempra.
Luz del Sur serves the southern region of Lima, Peru, and is the largest electric company in the country.
Sempra Energy also announced Sempra LNG unit has entered into a memorandum of understanding with China Three Gorges Corp. (CTG), the ultimate parent company of CYP, regarding potential cooperation in supplying liquefied natural gas (LNG) to support demand growth in China, including the growth of natural gas-fired generation.
“This initial agreement with CTG represents an opportunity to support strong growth in natural gas demand in Asia, with future expansions of our LNG projects right here in North America,” said Martin.
The sale is expected to be completed in the first quarter of 2020, subject to customary closing conditions.
An active sales process continues for Sempra Energy’s electric businesses in Chile, including the company’s 100% stake in Chilquinta Energía S.A. and Tecnored S.A. The company expects to announce an agreement in the fourth quarter of this year.
BofA Merrill Lynch and Lazard are serving as financial advisors to Sempra on the sale, and White & Case is acting as legal advisor.
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