Enersis Lowers Capital Raise Sights

Chile’s Enersis has scaled back plans for a controversial capital increase, and will now target $5.92bn-$6.56bn, it says instead of $8.02bn. Shareholders decide on the plan December 20, with the process to be completed within six months of approval. The utility holdco originally announced the deal in July, but has met stiff resistance from both regulators and minority shareholders. Spain’s Endesa, the controller, had planned to subscribe its share with $4.86bn in LatAm assets it holds outside of Enersis. Authorities found a conflict of interest in the deal, and pension funds balked at the assets’ valuation. After multiple outside appraisals, the assets will now be valued at $3.59bn-$3.97bn. The operation would raise funds mainly for greenfield projects and M&A expansion. In addition to simplifying Enersis’ complicated structure, Endesa is looking to reduce the gap between its Ebitda and net income, as well as reduce dividend leakage within the Enersis group. The operation could also increase the liquidity of Enersis shares, and give it more cash to continue making acquisitions and developing projects in the region.