Enel Peru says state-run Chinese power firm eying possible purchase

Enel Peru says state-run Chinese power firm eying possible purchase
FILE PHOTO: A logo of Italian multinational energy company Enel is seen at the Milan headquarters, Italy, February 5, 2020. REUTERS/Flavio Lo Scalzo/File Photo

LIMA :The Peruvian unit of Italy’s biggest power utility, Enel, said on Friday that state-owned China Southern Power Grid is carrying out “due diligence” on the local unit for a possible purchase offer on its energy distribution operations.

Bloomberg reported earlier on Friday that the Chinese firm is weighing a possible bid for Enel’s distribution business in Peru, which it said could be valued at some $3 billion.

Enel’s local unit said in a statement, however, that it has no information about the status of talks or the possible amount of the “eventual transaction.”

Due diligence often refers to a legally required appraisal of a business by a potential purchaser geared toward better understanding all assets and liabilities.

In recent years, Chinese companies have shown growing interest in Latin American commodities, including energy sector investments.

The Guangzhou-based power company’s owner, state-owned Assets Supervision and Administration Commission of the State Council (SASAC), did not immediately respond to a request for comment.

In November, Enel announced an asset sale plan worth 21 billion euros ($22 billion) to be completed by 2025 with the aim of cutting debt while focusing on six markets in Europe and the Americas.

Part of that announcement included the plan to put up for sale Enel Peru’s distribution and generation assets, which the state-controlled firm said was already under way at the time.

Enel is also exiting Argentina and reducing its presence in Brasil after scaling back in Chile last year.

The Italian energy giant considers Spain, the United States, Brazil, Chile and Colombia as its core countries, in addition to its home market.

On Friday, shares of Enel Distribucion Peru rose 25 per cent on Lima’s main stock exchange.

($1 = 0.9479 euros)


Source: Reuters