IBERDROLA has reached an agreement with Empresas Públicas de Medellín (EPM) to sell the Colombian company all its indirect shareholdings in four Guatemalan utilities for $326.45 million (€232.9 million).
The deal includes 49% of Distribuidora Eléctrica Centroamericana Dos (II), S.A. (DECAII) – the largest shareholder of Empresa Eléctrica de Guatemala (EEGSA) with an 80.88% stake -, 100% of Gestión de Empresas Eléctricas, S.A. (Gesa), 51% of Generadores Hidroeléctricos, S.A. (Genhidro) and 3.12% of Hidronorte, S.A. In the first phase the companies have completed the sale of DECAII and Gesa, coinciding with the signing of the deal, with IBERDROLA receiving $307.95 million (€219.7 million) with immediate effect.
The $18.5 million (€13.2 million) sale of the indirect interests in Genhidro and Hidronorte is expected to be completed by the end of the year.
DECAII is the largest shareholder of Empresa Eléctrica de Guatemala (EEGSA), Guatemala’s largest power distributor with 930,000 customers, and of COMEGSA, the largest supplier with a 51% market share. It also holds majority shareholdings in Trelec (electricity transmission), Ideamsa (real estate), Amesa (materials administration), Energica (electricity construction and maintenance) and Credieegsa (personnel and administrative services).
Gesa is a company specialising in the exploration and development of new electricity businesses. Lastly, Genhidro is a holding company for generation assets, chiefly the Río Bobos hydroelectric plant, while Hidronorte has operated this 10 MW facility plant since 1995.
Empresas Públicas de Medellín is chiefly engaged in the provision of water, gas and electricity services. Over the last decade the company has moved into other regional markets via the acquisition of shares in other companies, creating the Grupo Empresarial EPM, which includes Edatel, Emtelsa, Emtelco, ETP, EPM Bogotá, Orbitel and Colombia Móvil. In the energy sector, EPM has over 3.1 million customers in Colombia grouped at its subsidiaries Electrificadora del Quindío S.A. (EDQ), Central Hidroeléctrica de Caldas S.A. (CHEC), Electrificadora de Santander S.A. (ESSA) and Centrales Eléctricas de Norte de Santander S.A. (CENS).
IBERDROLA entered Guatemala in 1998, when it acquired 80.88% of the Guatemalan government’s stake in EEGSA in a consortium with TPS de Ultramar – a subsidiary of Teco Energy- and EDP.
IBERDROLA’s aim is to focus its Latin American presence on Mexico and Brazil, which have become key future growth drivers for the group as two of the world’s most dynamic markets. With over 5,000 MW of installed capacity, IBERDROLA is Mexico’s leading private power generation company, second only to the state-owned Comisión Federal de Electricidad. In Brazil is has a 39% stake in Neoenergía, the largest distributor in the northeast of the country which, with 30 million supply points, is the region with the largest number of customers in the country.
The sale of its subsidiaries in Guatemala is part of IBERDROLA’s plan to maintain the financial strength of the Group, to optimise its capital structure and to deliver the pace of investment pledged to the markets.
The operation is in addition to others announced in 2010 by IBERDROLA including the sale of the Seneca Lake gas storage facility in the US, 15.68% of Petroceltic International PLC, 2.7% of EDP and of the gas distributors Connecticut Natural Gas Corporation (CNG), The Southern Connecticut Gas Company (SCG) and The Berkshire Gas Company (BGC)
In 2009 the Company also sold its stakes in the Sagunto and BBG regasification plants, the Ibener hydroelectric plant in Chile, 10% of Gamesa and 27% of Guatemala’s telecommunications operator, Navega.
This communication does not constitute an offer of purchase, sale or exchange or a request for an offer of purchase, sale or exchange of values. The shares of Iberdrola S.A. cannot be offered or sold in the United States, except if this is carried out through a declaration of effective notification of what is laid out in the Securities Act or under the protection of a valid exemption of the need for notification.