SAN DIEGO, Oct. 14, 2019 /PRNewswire/ -- Sempra Energy
(NYSE:SRE) today announced that it has entered into an agreement to
sell its equity interests in its Chilean businesses, including its
100% stake in Chilquinta Energía S.A. (Chilquinta Energía), to
State Grid International Development Limited (SGID). Sempra
Energy's interests will be sold for $2.23
billion in cash, subject to adjustments for working capital
and net indebtedness and other adjustments. The sale also will
include Sempra Energy's 100% interest in Tecnored S.A., which
provides electric construction and infrastructure services to
Chilquinta Energía and third parties, and its 50% interest in
Eletrans S.A., which owns, constructs, operates and maintains power
transmission facilities.
"This agreement is really important. It moves our company one
step closer to completing the sale of our South American businesses
and concentrating our investment strategy right here in
North America," said Jeffrey W. Martin, chairman and CEO of Sempra
Energy. "All of our companies in Chile, including Chilquinta Energía and
Tecnored S.A., are excellent businesses with a strong focus on
safety, reliability and customer service. We are so appreciative of
the hard work and dedication of our Chilean team over the past 20
years."
Chilquinta Energía signed an agreement to purchase the remaining
50% interest in Eletrans S.A. from Sociedad Austral de Electricidad
S.A. Closing of this transaction, which will enable Sempra Energy
to transfer 100% ownership of Eletrans S.A. to SGID, is contingent
on the closing of the sale of Sempra Energy's Chilean businesses
and will not change the economics of the transaction for Sempra
Energy.
The sale to SGID is expected to be completed in the first
quarter of 2020, subject to customary closing conditions, including
approval by the Chilean anti-trust authority, certain Chinese
regulatory approvals and approval by the Bermuda Monetary
Authority.
Today's announcement follows Sempra Energy's agreement to sell
its equity interests in its Peruvian business, including its 83.6%
stake in Luz del Sur S.A.A., to
China Yangtze Power International (Hongkong) Co., Limited. That
sale, which was announced in September, is also expected to be
completed in the first quarter of 2020, subject to customary
closing conditions, including approval by the Peruvian anti-trust
authority and the Bermuda Monetary Authority.
In combination, these transactions would conclude Sempra
Energy's planned sale of its South American businesses for combined
proceeds of approximately $5.82
billion in cash, subject to adjustments and satisfaction of
their closing conditions.
"Proceeds from both of these transactions will be used to
advance our business strategy by strengthening our company's
balance sheet and supporting the growing capital needs of our
utilities in California and
Texas," said Martin.
BofA Merrill Lynch and Lazard are serving as financial advisors
to Sempra Energy on the sales, and White & Case is serving as
legal advisor.
Chilquinta Energía is the third-largest distributor of
electricity in Chile. Chilquinta
Energía provides electricity to approximately 2 million consumers
in the regions of Valparaíso and Maule in central Chile, and is also active in the development
and operation of electric transmission lines.
SGID, a wholly-owned subsidiary of State Grid Corporation of
China (SGCC), is incorporated in
Hong Kong as a limited liability
company. It leverages SGCC's operational strengths and financial
support to actively pursue investment opportunities worldwide and
improve the operating efficiency of its portfolio of companies.
SGID currently has investments in the
Philippines, Brazil,
Portugal, Australia, Hong Kong SAR, Italy and Greece. SGCC, headquartered in Beijing, China, is the world's largest power
utility corporation, and has extensive experience in constructing
and operating electricity transmission and distribution networks.
The company's power grid network covers 26 provinces in
China, accounting for more than
88% of China's territory, and
serves a population of over 1.1 billion.
Sempra Energy's mission is to be North
America's premier energy infrastructure company. With more
than $60 billion in total assets
reported in 2018, the San
Diego-based company is the utility holding company with the
largest U.S. customer base. The Sempra Energy companies' more than
20,000 employees deliver energy with purpose to approximately 40
million consumers worldwide. The company is focused on the most
attractive markets in North
America, including California, Texas, Mexico
and the LNG export market. Sempra Energy has been consistently
recognized for its leadership in diversity and inclusion, and
sustainability, and is a member of the S&P 500 Utilities Index
and the Dow Jones Utility Index.
This press release contains statements that are not
historical fact and constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements can be identified by words such as
"believes," "expects," "anticipates," "plans," "estimates,"
"projects," "forecasts," "contemplates," "assumes," "depends,"
"should," "could," "would," "will," "confident," "may," "can,"
"potential," "possible," "proposed," "target," "pursue," "outlook,"
"maintain," or similar expressions or when we discuss our guidance,
strategy, plans, goals, vision, mission, opportunities,
projections, initiatives, objectives or intentions. Forward-looking
statements are not guarantees of performance. They involve risks,
uncertainties and assumptions. Future results may differ materially
from those expressed in the forward-looking statements.
Factors, among others, that could cause our actual results
and future actions to differ materially from those described in any
forward-looking statements include risks and uncertainties relating
to: the possibility that, in connection with the agreements to sell
Sempra Energy's interests in its Peruvian businesses, including its
83.6% interest in Luz del Sur, and
its Chilean businesses, including its 100% interest in Chilquinta
Energía, the closing conditions may not be satisfied or waived in a
timely manner or at all, including that a governmental entity may
prohibit, delay or refuse to grant a necessary regulatory approval,
that we may be subject to indemnification obligations or material
adjustments to the sale prices, and that we may be unable to fully
realize the anticipated benefits; the greater degree and prevalence
of wildfires in California in
recent years and the risk that we may be found liable for damages
regardless of fault, such as where inverse condemnation applies,
and risk that we may not be able to recover any such costs in rates
from customers in California or
otherwise, including due to insufficient amounts in the wildfire
fund; actions and the timing of actions, including decisions,
investigations, new regulations and issuances of permits and other
authorizations and renewal of franchises by the Comisión Federal de
Electricidad (CFE), California Public Utilities Commission, U.S.
Department of Energy, California Department of Conservation's
Division of Oil, Gas, and Geothermal Resources, Los Angeles County
Department of Public Health, U.S. Environmental Protection Agency,
Federal Energy Regulatory Commission, Pipeline and Hazardous
Materials Safety Administration, Public Utility Commission of
Texas, states, cities and
counties, and other regulatory and governmental bodies in the U.S.
and other countries in which we operate; the success of business
development efforts, construction projects, and major acquisitions,
divestitures and internal structural changes, including risks in
(i) obtaining or maintaining authorizations; (ii) completing
construction projects on schedule and budget; (iii) obtaining the
consent of partners; (iv) counterparties' ability to fulfill
contractual commitments; (v) winning competitively bid
infrastructure projects; (vi) the ability to complete contemplated
acquisitions and/or divestitures and the disruptions caused by such
efforts; and (vii) the ability to realize anticipated benefits from
any of these efforts once completed; the resolution of civil and
criminal litigation, regulatory investigations and proceedings, and
arbitrations; actions by credit rating agencies to downgrade our
credit ratings or those of our subsidiaries or to place those
ratings on negative outlook and our ability to borrow at favorable
interest rates; deviations from regulatory precedent or practice
that result in a reallocation of benefits or burdens among
shareholders and ratepayers; denial of approvals of proposed
settlements; delays in, or denial of, regulatory agency
authorizations to recover costs in rates from customers or
regulatory agency approval for projects required to enhance safety
and reliability; and moves to reduce or eliminate reliance on
natural gas; the availability of electric power and natural gas and
natural gas storage capacity, including disruptions caused by
failures in the transmission grid, limitations on the withdrawal or
injection of natural gas from or into storage facilities, and
equipment failures; expropriation of assets, the failure to honor
the terms of contracts by foreign governments and state-owned
entities such as the CFE, and other property disputes; risks posed
by actions of third parties who control the operations of our
investments; weather conditions, natural disasters, accidents,
equipment failures, computer system outages, explosions, terrorist
attacks and other events that disrupt our operations, damage our
facilities and systems, cause the release of harmful materials,
cause fires and subject us to third-party liability for property
damage or personal injuries, fines and penalties, some of which may
not be covered by insurance (including costs in excess of
applicable policy limits), may be disputed by insurers or may
otherwise not be recoverable through regulatory mechanisms or may
impact our ability to obtain satisfactory levels of affordable
insurance; cybersecurity threats to the energy grid, storage and
pipeline infrastructure, the information and systems used to
operate our businesses, and the confidentiality of our proprietary
information and the personal information of our customers and
employees; actions of activist shareholders, which could impact the
market price of our securities and disrupt our operations as a
result of, among other things, requiring significant time by
management and our board of directors; changes in capital markets,
energy markets and economic conditions, including the availability
of credit; volatility in currency exchange, interest and inflation
rates and commodity prices and our ability to effectively hedge the
risk of such volatility; the impact of federal or state tax reform
and our ability to mitigate adverse impacts; changes in foreign and
domestic trade policies and laws, including border tariffs and
revisions to or replacement of international trade agreements, such
as the North American Free Trade Agreement, that may increase our
costs or impair our ability to resolve trade disputes; the impact
at San Diego Gas & Electric Company on competitive customer
rates and reliability of electric transmission and distribution
systems due to the growth in distributed and local power generation
and from possible departing retail load resulting from customers
transferring to Direct Access and Community Choice Aggregation or
other forms of distributed and local power generation and the
potential risk of nonrecovery for stranded assets and contractual
obligations; Oncor Electric Delivery Company LLC's (Oncor) ability
to eliminate or reduce its quarterly dividends due to regulatory
capital requirements and other regulatory and governance
commitments, including the determination by a majority of Oncor's
independent directors or a minority member director to retain such
amounts to meet future requirements; and other uncertainties, some
of which may be difficult to predict and are beyond our
control.
These risks and uncertainties are further discussed in the
reports that Sempra Energy has filed with the U.S. Securities and
Exchange Commission (SEC). These reports are available through the
EDGAR system free-of-charge on the SEC's website, www.sec.gov.
Investors should not rely unduly on any forward-looking statements.
These forward-looking statements speak only as of the date hereof,
and the company undertakes no obligation to update or revise these
forecasts or projections or other forward-looking statements,
whether as a result of new information, future events or
otherwise.
Sempra South American Utilities, Sempra North American
Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities,
Oncor Electric Delivery Company LLC (Oncor) and Infraestructura
Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies
as the California utilities, San
Diego Gas & Electric Company (SDG&E) or Southern California
Gas Company (SoCalGas), and Sempra South American Utilities, Sempra
North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra
Texas Utilities, Oncor and IEnova are not regulated by the
California Public Utilities Commission.
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SOURCE Sempra Energy