US utility PSEG Global has signed an agreement with AEI for the sale of its interests in two electricity distribution companies in South America for $685 million.
PSEG's sale of its 50 per cent stake in Chile’s Chilquinta Energia S.A. and its 38 per cent share in Peru’s Luz del Sur S.A.A. is in line with its strategy to sell off international operations and focus on core operations. AEI, formerly known as Ashmore Energy International, and PSEG expect to close the transaction by the end of 2007.
“Divesting these holdings is consistent with our investment approach concerning our international assets: remain open to opportunistically monetise investments when market conditions warrant, increase the financial strength of our company and redeploy capital into our core business,” said PSEG Global president Matthew McGrath.
Chilquinta is the fourth largest distributor of electricity in Chile. It serves more than 576 000 customers primarily in Chile’s V Region, an area of approximately 11 500 sq km located just north and west of Santiago. Luz del Sur is one of the largest companies in Peru serving approximately 800 000 customers in the rapidly growing commercial and residential areas in Peru’s capital, Lima.
The transaction will reduce PSEG Global’s Latin American holdings to the Saesa group of distribution companies in Chile and some generation assets in Venezuela. AEI owns and operates energy infrastructure businesses in 18 countries – mostly emerging markets – worldwide.
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