Enersis

Christmas has come early – for Chile’s Enersis.

Shareholders in the energy company have approved Chile’s biggest capital increase — a whopping sum of nearly $6bn (if you think that´s a lot, remember they were originally planning to seek $8bn).

It was not an easy path — Enersis battled pension funds, which are key investors in Chile, over the amount and minority shareholders baulked at the valuation of some of the assets that Spanish energy company Endesa said it would use to subscribe its share of the fundraising. Endesa, by the way, is owned by Enel of Italy. 

On Friday Chile’s securities regulator (SVS, for its initials in Spanish) put up a roadblock to Enersis’s novel plan for an $8bn cash call. For $4.86bn of the funds, Enersis – Chile’s largest power producer – planned to accept assets in lieu of cash from its majority owner, Spanish power company Endesa. And that’s where the problems began: Endesa’s valuation of the assets was, to some analysts and shareholders, far too rich. Among the shareholders, Chilean pension funds, known in Chile as AFPs, “strenuously rejected” the cash call because of the valuation. 

Enersis announced plans to tap the market for $8bn on Wednesday as Chile’s largest power producer looks to shore up funding for expansion. The capital increase would be the largest such cash call in Chilean stock market history, a move that could help Enersis become the region’s biggest private power company

“For the Chilean market, it is a huge amount of money,” said Felipe Etchegaray of IM Trust, a financial firm based in Santiago.