Cia. General de Electricidad SA, owner of Chile’s second-largest power distributor, rose to an eight-month high after agreeing to sell a generation unit for more than analysts had expected.
CGE advanced 1.9 percent to 2,750 pesos at the close in Santiago, the highest level since April 27. Chile’s benchmark Ipsa index gained 0.2 percent.
The company agreed to sell its Iberoamericana de Energia Ibener SA subsidiary to Charlotte, North Carolina-based Duke Energy Corp. (DUK) for $415 million, according to a statement today by Duke. The purchase includes two hydropower plants and excludes CGE’s water rights for new projects. Duke will assume 27.8 billion pesos ($58 million) of debt that CGE’s Enerplus SA unit had with Ibener, according to a regulatory filing.
“It’s a good deal as the market was speculating that CGE would get about $400 million for all of its generation assets,” Alfredo Parra, an analyst at EuroAmerica Corredores de Bolsa SA, said in a phone interview from Santiago. “CGE also reduced debt through the sale, so it can now give the money back as dividends.”
CGE said in the filing with the country’s securities regulator that it will continue to study strategic options for Enerplus, which is developing a new hydroelectric power plant in southern Chile.
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