An agreement between Grid Corporation of China and the United States based power company Sempra Energy is most likely in relation to a sale of Chilean business of the US firm to the Chinese company in a deal that is estimated to be worth about $3 billion, claimed a report by the news agency Reuters citing information from sources with knowledge of the matter. This is part of the efforts of the US company to sell off some of its non-core businesses.
Following the exposure of Sempra and other similar companies in the utilities business to greater legal liabilities after a wave of wildfires in California, Sempra has been trying to find out ways to increase its finances and enhance the appeal of the company to investors. The company had also been facing pressures to scale down its global operations by hedge fund Elliott Management Corp and investment firm Bluescape Group.
According to the Reuters, announcement of the deal between the two countries can possible be made at the start of next week. However the sources in the report also cautioned that the deal could also get cancelled at the last moment.
There were no comments on the news available from Sempra and State Grid Corporation of China.
There has been a significant increase in demand in China for South America’s raw materials because of the phenomenal boom in the Chinese economy in the last two decades. This has seen Chinese companies making more investments in Chile to ensure the availability of the resources.
Chile is the largest copper exporter of the world and is one of the most open economies of Latin America. The country has not taken any sides in the ongoing trade war between the US and China and has instead been professing the need for more open markets.
The announcement of winding down of its South American businesses was made by Sempra in January. The changed strategy of the company was now is to focus on its core US and Mexican markets and as a part of this divestment of its non-core businesses, the company announced last month that it would be selling out its business in Peru to a unit of China Yangtze Power Co in a deal worth $3.6 billion.
According to its latest quarterly regulatory filing, Elliott has now exited its investment in Sempra.
Tecnored SA, which provides construction services to Chilquinta, and Chilquinta Energía SA, the third-largest distributor of electricity in the country, comprise the Chilean businesses of Sempra.
There were other bidders for the Chilean and Peruvian businesses of Sempra which included Italian utility Enel which had announced in June that it had bid for both the businesses.
(Source:www.reuters.com)
Following the exposure of Sempra and other similar companies in the utilities business to greater legal liabilities after a wave of wildfires in California, Sempra has been trying to find out ways to increase its finances and enhance the appeal of the company to investors. The company had also been facing pressures to scale down its global operations by hedge fund Elliott Management Corp and investment firm Bluescape Group.
According to the Reuters, announcement of the deal between the two countries can possible be made at the start of next week. However the sources in the report also cautioned that the deal could also get cancelled at the last moment.
There were no comments on the news available from Sempra and State Grid Corporation of China.
There has been a significant increase in demand in China for South America’s raw materials because of the phenomenal boom in the Chinese economy in the last two decades. This has seen Chinese companies making more investments in Chile to ensure the availability of the resources.
Chile is the largest copper exporter of the world and is one of the most open economies of Latin America. The country has not taken any sides in the ongoing trade war between the US and China and has instead been professing the need for more open markets.
The announcement of winding down of its South American businesses was made by Sempra in January. The changed strategy of the company was now is to focus on its core US and Mexican markets and as a part of this divestment of its non-core businesses, the company announced last month that it would be selling out its business in Peru to a unit of China Yangtze Power Co in a deal worth $3.6 billion.
According to its latest quarterly regulatory filing, Elliott has now exited its investment in Sempra.
Tecnored SA, which provides construction services to Chilquinta, and Chilquinta Energía SA, the third-largest distributor of electricity in the country, comprise the Chilean businesses of Sempra.
There were other bidders for the Chilean and Peruvian businesses of Sempra which included Italian utility Enel which had announced in June that it had bid for both the businesses.
(Source:www.reuters.com)
