Essal Set for Share Offering

Chile’s Essal is scheduled to announce pricing today on an up $80m equity offering as government entity Corporacion de Fomento de la Produccion (Corfo) looks to reduce its 45% position in the water utility. The issuer is targeting CLP90-CLP100 per share for the 387.7m secondary shares, indicating a likely size of CLP34.89bn-CLP38.77bn ($67m-$75m) The all-local sale is essentially an IPO, as Essal shares are illiquid, and the company is much smaller than the other government-backed water utilities that have come to the market this year. Corfo had also been considering a direct sale of a stake through an M&A deal, as it looks to get its position down to 5%. The sale is a repeat, though at a smaller size, of what Corfo did earlier in the year with its positions in Aguas Andinas, Essbio and Esval, under a broad government plan to sell assets to help with reconstruction costs from the 2010 earthquake. Banchile, Bank of America Merrill Lynch and IMTrust are managing the sale.