Sempra Energy Completes $2.23 Billion Divestiture Of Chilean Businesses

Rhea-AI Summary

Sempra Energy (NYSE: SRE) has completed the sale of its Chilean businesses to State Grid International Development Limited for approximately $2.23 billion. This divestiture finalizes the company's exit from South America, generating total proceeds of about $5.82 billion from the sale of both Chilean and Peruvian assets. Proceeds will enhance Sempra's balance sheet and liquidity. The sale included Chilquinta Energía S.A., the third-largest electricity distributor in Chile, and aims to focus Sempra's operations in North America.

Positive

• Completed divestiture of Chilean businesses for approximately $2.23 billion.
• Total proceeds from South American asset sales reached $5.82 billion.
• Strengthens balance sheet and liquidity position.

Negative

• None.

SAN DIEGO, June 24, 2020 /PRNewswire/ -- -1%26h%3D337079658%26u%3Dhttp%253A%252F%252Fsempra.com%252F%26a%3DSempra%2BEnergy%2B&a=Sempra+Energy" rel="nofollow">Sempra Energy (NYSE: SRE) today announced that it has completed the sale of its Chilean businesses, generating approximately $2.23 billion in total cash proceeds, subject to post-closing adjustments. The sale to State Grid International Development Limited (SGID) includes Sempra Energy's 100% stake in Chilquinta Energía S.A. (Chilquinta Energía).

"Today's announcement completes the divestiture of all of Sempra Energy's South American assets – an important step in narrowing our strategic focus to the most attractive markets in North America," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "This sale furthers our mission to be North America's premier energy infrastructure company. I commend all parties involved in getting this deal completed and want to thank the hardworking employees of Chilquinta Energía for their dedication to powering Chile's homes, businesses, medical facilities and more."

The sale also includes a 100% interest in Tecnored S.A., which provides electric construction and infrastructure services to Chilquinta Energía and third parties, and a 50% interest in Eletrans S.A., which owns, constructs, operates and maintains power transmission facilities.

The completion of the Chilean transactions concludes Sempra Energy's sales of its South American businesses, resulting in approximately $5.82 billion in combined total cash proceeds, subject to post-closing adjustments. Proceeds from the sales will be used to further strengthen the company's balance sheet and liquidity position.

In April, Sempra Energy announced the completion of the sale of its Peruvian businesses, including its 83.6% interest in Luz del Sur S.A.A., to an affiliate of China Yangtze Power International (Hongkong) Co., Limited, generating approximately $3.59 billion in total cash proceeds, subject to post-closing adjustments.

About Chilquinta Energía

Chilquinta Energía is the third-largest distributor of electricity in Chile. Chilquinta Energía provides electricity to a population of approximately 2 million in the regions of Valparaíso and Maule in central Chile and is active in the development and operation of electric transmission lines.

About State Grid International Development Limited

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, Greece, and Oman. SGCC, headquartered in Beijing, 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. The company ranked fifth in 2019 Fortune Global 500.

About Sempra Energy

Sempra Energy's mission is to be North America's premier energy infrastructure company. With more than $60 billion in total assets in 2019, the San Diego-based company is the utility holding company with the largest U.S. customer base. The Sempra Energy companies' more than 18,000 employees deliver energy with purpose to over 35 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 sustainability, and diversity and inclusion, and is a member of the S&P 500 Utilities Index and the Dow Jones Utility Index. The company was also named one of the "World's Most Admired Companies" for 2020 by Fortune Magazine.

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. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees of performance. Future results may differ materially from those expressed in the forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.

In this press release, forward-looking  statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "target," "pursue," "outlook," "maintain," or similar expressions, or when we discuss our guidance, strategy, goals, vision, mission, opportunities, projections or intentions.

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: California wildfires and the risk that we may be found liable for damages regardless of fault and the risk that we may not be able to recover any such costs from insurance, the wildfire fund established by California Assembly Bill 1054 or in rates from customers; decisions, investigations, regulations, issuances of permits and other authorizations, renewal of franchises, and other actions by the Comisión Federal de Electricidad, California Public Utilities Commission, U.S. Department of Energy, Public Utility Commission of Texas, regulatory and governmental bodies and jurisdictions in the U.S. and other countries in which we operate; the success of business development efforts, construction projects and major acquisitions and divestitures, including risks in (i) the ability to make a final investment decision and completing construction projects on schedule and budget, (ii) obtaining the consent of partners, (iii) counterparties' financial or other ability to fulfill contractual commitments, (iv) the ability to complete contemplated acquisitions and/or divestitures, and (v) the ability to realize anticipated benefits from any of these efforts once completed; the impact of the COVID-19 pandemic on our (i) ability to commence and complete capital and other projects and obtain regulatory approvals, (ii) supply chain and current and prospective counterparties, contractors, customers, employees and partners, (iii) liquidity, resulting from bill payment challenges experienced by our customers, decreased stability and accessibility of the capital markets and other factors, and (iv) ability to sustain operations and satisfy compliance requirements due to social distancing measures or if employee absenteeism were to increase significantly; the resolution of civil and criminal litigation, regulatory investigations and proceedings, and arbitrations; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow at favorable interest rates; moves to reduce or eliminate reliance on natural gas and the impact of the extreme volatility and unprecedented decline of oil prices on our businesses and development projects; weather, natural disasters, accidents, equipment failures, computer system outages and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to 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; 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; 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; expropriation of assets, the failure of foreign governments and state-owned entities to honor the terms of contracts, and property disputes; the impact at San Diego Gas & Electric Company (SDG&E) on competitive customer rates and reliability due to the growth in distributed power generation and from departing retail load resulting from customers transferring to Direct Access, Community Choice Aggregation or other forms of distributed power generation and the 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 and governance requirements and commitments, including by actions of Oncor's independent directors or a minority member director; volatility in foreign currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility; changes in trade policies, laws and regulations, including 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 of changes to federal and state tax laws and our ability to mitigate adverse impacts; 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, and on the company's website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.

Sempra South American Utilities, Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or Southern California Gas Company, 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

FAQ

What was the amount generated from the sale of Sempra Energy's Chilean businesses?

Sempra Energy generated approximately $2.23 billion from the sale of its Chilean businesses.

What is the significance of Sempra Energy's divestiture of its South American assets?

The divestiture marks Sempra Energy's strategic focus on North American markets, consolidating efforts and improving financial strength.

Which companies were included in the sale to State Grid International Development Limited?

The sale included a 100% stake in Chilquinta Energía S.A., Tecnored S.A., and a 50% interest in Eletrans S.A.

How much cash proceeds did Sempra Energy obtain from the sales of its South American assets?

Sempra Energy obtained a total of approximately $5.82 billion from the sales of its South American assets.

What is the future focus of Sempra Energy after the sale of its Chilean businesses?

Sempra Energy aims to concentrate on becoming North America's premier energy infrastructure company.