Enel has agreed to sell its equity stakes in Peruvian power generation firms Enel Generación Perú and Compañía Energética Veracruz to Niagara Energy for nearly $1.4bn.
The deal is being executed by the Italian energy company through its subsidiaries Enel Américas and Enel Perú.
Enel Perú is controlled by Enel through the Chilean listed company Enel Américas. Niagara Energy is a Peruvian firm controlled by the global investment fund Actis.
According to the terms of the agreement, Niagara Energy will acquire the stakes owned by Enel Perú and Enel Américas in Enel Generación Perú’s share capital, which are 66.5% and 20.46%, respectively.
Besides, the Peruvian company will buy the interest held by Enel Perú in Compañía Energética Veracruz’s share capital.
The transaction represents a total enterprise value of nearly $2.1bn.
Since 2007, Enel has been in the power distribution and supply business in Peru with nearly 1.6 million end users in northern Lima.
The company has over 2.4GW of installed capacity from its Peruvian generation assets, which include hydroelectric, wind, solar, and thermoelectric power plants.
The Italian energy company will divest its interest in Enel Generación Perú through a full takeover bid that Niagara Energy will launch after meeting the conditions precedent for the transaction.
Through the sale, Enel aims to reduce its consolidated net debt of nearly €1.6bn between 2023 and 2024.
Enel stated: “The transaction is in line with the Group’s Strategic Priorities, which envisage the repositioning of Enel on countries where the Group has higher growth potential as well as an integrated presence, namely Italy, Spain, the United States, Brazil, Chile and Colombia.”
The deal is also expected to have a positive impact on Enel’s reported net income in 2024 amounting to approximately €60m.
Subject to certain preceding conditions such as the clearance from the competent antitrust authority in Peru, the divestiture is anticipated to close by Q2 2024.
