Chile Eyes Utility Stake Sale

The Chilean government is planning to sell its stakes in local water utilities to raise about $1.6bn, according to the finance ministry. The government would sell its 34.98% stake in Aguas Andinas, 43.44% in Essbio, 29.43% in Esval and 45.46% in Essal. Proceeds will be used to capitalize state-owned companies Codelco, which has a $10bn investment plan, as well as Enap, Metro and EFE. The most likely buyers could be infrastructure companies that are already invested in the utilities, according to a Chilean investment banker not involved in the deal. France’s infrastructure company GDF Suez, for example, owns 57% of Aguas Metropolitanas, which owns 50% of Aguas Andinas, the company says. By capitalizing these companies, the finance ministry says, the government will have resources to invest in the reconstruction of the country, which was devastated by an earthquake in February. The minister of economy, Juan Andres Fontaine, announced the sale could take between 6-9 months. Financial advisors have not yet been hired, according to the ministry.