Codelco Readies E-CL Float

Codelco’s board has given the green light to begin the public sale of its shares in power company E-CL. The state-owned Chilean copper miner plans to float the 40% of the company it owns on the local market and in the US, a plan which had been among the options it had been considering for the asset since the middle of last year. A 3-week roadshow is set to begin Monday that will include meetings in the local, US, and other markets, according to a banker on the deal. Codelco hired LarrainVial and JPMorgan, which have been advising it on strategic alternatives, as coordinators. Santander is co-manager. Analysts have estimated the stake would be worth about $1.1bn. Codelco co-owns E-CL with France’s GDF Suez, which holds a 52.4% stake, in addition to a 7.6% free float. Though GDF Suez has shown interest in buying Codelco’s position, the banker on the deal says they do not have any preferential right in the divesture. Proceeds of the sale are expected to be used to fund the copper miner’s investment plans. E-CL shares closed Friday at CLP1,221. Chile’s government has been considering the sale of E-CL and some of its other large assets as it maps out funding for earthquake reconstruction costs. It has said multiple times that a sale of part of Codelco itself is off the table.