Sempra Plans Mexican IPO Marking Energy Industry’s Bolsa Debut

Sempra Energy (SRE), a U.S. gas distributor, sought permission to sell shares of its local unit in Mexico, the first offering for an energy company in a nation poised to break state-owned Petroleos Mexicanos’s monopoly on fuel delivery.

Bolsa Mexicana (BOLSAA) de Valores SAB, the Mexican exchange operator, announced Sempra’s request in a statement today. Sempra Mexico sent a separate regulatory filing to the exchange yesterday saying the company had approved a measure that would allow it to sell shares.

Sempra sold 5.2 billion pesos ($409 million) of bonds in Mexico last week, the biggest local issuance this year, according to data compiled by Bloomberg. Pemex, as the oil producer is known, last month announced a joint venture with Sempra to build the first phase of a natural-gas pipeline in Northern Mexico. Sempra also won a contract in October with state power utility Comision Federal de Electricidad, or CFE, to build a gas pipeline and operate it for 25 years.

“This is a company that has been betting on Mexico for many years,” David Shields, a Mexico City-based independent energy analyst and publisher of Energia magazine, said in a phone interview. The share sale “is a signal that Sempra now sees Mexico not only as a destination for gas distribution but also as a funding source,” he said.

Mexican Investment

Sempra is planning to invest $1.15 billion in Mexico “in the coming years,” Carlos Ruiz, head of Sempra’s Mexico unit, said in a Jan. 18 statement on the company’s website.

Mexican president Enrique Pena Nieto and the heads of the three largest political parties on Dec. 2 signed the Pact for Mexico, calling for the passage of an energy bill that opens some Pemex activities, such as refining and fuel distribution, to competition.

Doug Kline, a spokesman for San Diego-based Sempra, declined to comment on the share sale filing.

The CFE pipeline contract will connect gas supplies from Arizona to the port of Guaymas in northwestern Mexico. Once the project is completed the pipeline will have capacity for 760 million cubic feet a day. Investment in the CFE project may be $630 million to $730 million, according to a presentation from Pemex.

To contact the reporter on this story: Carlos Manuel Rodriguez in Mexico City at carlosmr@bloomberg.net

To contact the editor responsible for this story: Jonathan Roeder at jroeder@bloomberg.net

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