Sempra Energy Completes $3.59 Billion Divestiture Of Luz Del Sur In Peru
- Proceeds From Transaction Will Be Reinvested to Further Strengthen Balance Sheet and Liquidity
- Company on Track to Close Sale of Chilean Assets
Apr 24, 2020
SAN DIEGO, April 24, 2020 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today announced that it completed the sale of its Peruvian businesses, generating approximately $3.59 billion in total cash proceeds, subject to post-closing adjustments. The sale to China Yangtze Power International (Hongkong) Co., Limited (CYP) and assigned to Yangtze Andes Holding Co., Limited includes Sempra Energy's 83.6% stake in Luz del Sur S.A.A. (Luz del Sur), as well as Tecsur S.A., which provides electric construction and infrastructure services to Luz del Sur and third parties, and Inland Energy S.A.C., Luz del Sur's generation business.
"We are very pleased with today's announcement as the sales proceeds will be used to further strengthen our balance sheet and our already solid liquidity position," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "We're also very excited that, in the face of current travel restrictions, all parties worked safely together to complete this deal as expected. We also remain on track for the sale of our Chilean businesses, which will complete the divestiture of all of Sempra Energy's South American assets and further our mission to become North America's premier energy infrastructure company."
Sempra Energy continues to move forward with the sale of its Chilean assets, including its 100% interest in Chilquinta Energía S.A., to State Grid International Development Limited for approximately $2.23 billion in total cash proceeds, subject to adjustments and satisfaction of closing conditions.
In combination, these transactions will conclude Sempra Energy's planned sale of its South American businesses for approximately $5.82 billion in total cash proceeds, subject to adjustments and, with respect to the sale of its Chilean assets, satisfaction of closing conditions.
BofA Merrill Lynch is serving as a financial advisor to Sempra Energy on the sale, and White & Case is serving as legal advisor.
Luz del Sur serves the southern region of Lima, Peru, and is the largest electric company in the country.
About China Yangtze Power Co Ltd
About Sempra Energy
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.
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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 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; the impact of the COVID-19 pandemic on (i) our ability to commence and complete capital projects and obtain regulatory approvals, (ii) our current and prospective counterparties, customers and partners, and (iii) the stability of the capital markets; 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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