Iberdrola Gets Good Price on Chile Assets

Spanish electricity giant Iberdrola says it is selling all of its hydroelectric generation assets in Chile to locally owned Cia. General de Electricidad (CGE) for $297.6m. The assets sold are Iberdrola’s 94.74% stake in Iberoamericana de Energia and a 55% stake in Empresa Electrica Lican. Iberdrola says the sale is part of its strategic plan, which calls for EUR2.5bn in divestitures this year. Tomas Gonzalez, senior equity analyst at Celfin Capital, says CGE is mostly focused on electricity distribution and has only recently diversified into electricity generation. Gonzalez explains that these newly acquired assets produce some 140MW. He adds that CGE is building another hydroelectric generation plant that should generate some 150MW. The analyst believes the price CGE paid for the assets is above market value, or about $2.1m per MW. “In larger assets the price usually paid is about $1m per MW,” he adds.