Italy’s Enel SpA Sells Peru Assets to China’s CSGI for $2.9 Billion

The Peru generation and distribution operations have more than 1.5 million customers, according to Enel’s website

The transaction is in line with Enel’s most recent strategic plan which calls for reshaping the company’s geographical presence and slashing debt.
By Alberto Brambilla and Daniele Lepido
April 07, 2023 | 08:52 AM

Bloomberg — Enel SpA reached an agreement with China Southern Power Grid Co. to sell a set of Latin American assets, as Italy’s largest utility makes moves to cut its debt.

Rome-based Enel sold distribution operations in Peru for about $2.9 billion, the company said in a statement Friday, confirming an earlier report by Bloomberg. The enterprise value for the assets is about $4 billion, the company said.

The transaction is in line with Enel’s most recent strategic plan which calls for reshaping the company’s geographical presence and slashing debt, which ballooned to around €60 billion ($65 billion) at the end of last year.

The company’s strategy also includes disposing of assets worth €21 billion, mainly in Latin America and Europe, while focusing on six major markets, including Italy, the US and Brazil.

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Enel to Sell Assets Worth €21 Billion, Prepares Exit from Argentina, Peru

Impact on Debt

The asset sale announced Friday is expected to generate a reduction in consolidated net debt of about €3.1 billion in 2023 with a positive impact on net income of approximately €500 million, the statement said.

The company’s planned exit from Peru is not completed yet, however, as Enel still has a generation business in the country — with more than 2GW of installed capacity, nearly half from renewables — that remains up for sale.

The Peru generation and distribution operations have more than 1.5 million customers, according to Enel’s website. They distributed 8,441 gigawatt hours in 2021, according to a press release.

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The deal could further boost the Latin America presence of China Southern Power, known as CSGI, after it bought a 28% stake in Chilean utility Transelec. Latin America has become a key region for Chinese companies seeking alternative markets amid heightened scrutiny in Europe and the US.

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