AEI Sells LatAm Assets for $4.8bn

Ashmore Energy International (AEI) has announced the sale of 10 operating companies to 9 acquirers in a $4.8bn deal that represented 80% of its assets. Goldman Sachs and Itau had been advising the Houston-based energy company on its asset divestiture, which included companies in Brazil, Argentina, and Chile. AEI says it will use the proceeds from the sale to pay down debt and PIK notes. It is planning to reorganize itself around its core power generation assets. The largest component of the deal is the sale of a 99.86% stake in Brazilian power distribution company Elektro to Spain’s Iberdrola for $2.4bn. Citi and Santander advised the buyer. AEI also sold 50% of its Chilquinta subsidiary in Chile and a 37.97% stake in Luz del Sur in Peru to Sempra for $875m. Sempra declines to disclose the amount it is paying for the individual assets. Corficolombiana, EEB and 2 private funds acquired a 52.13% stake in Promigas, a Colombian natural gas company for $789.7m. EEB will also acquire a 60% stake in Peruvian natural gas distributor Calidda for $350m. EPM will meanwhile buy 51% of Panamanian company ENSA and an 86.41% stake in DelSur in El Salvador for $200m. Argentine power company Pampa Energia, meanwhile, is acquiring electric utility Aeseba for $50m and a majority stake in power distributor Emderesa for $90m. AEI is retaining assts in Asia and LatAm representing approximately $190m in Ebitda and $400m in net debt. AEI had $1.1bn in adjusted Ebitda for 2009 on $8.2bn in revenues. The company tried to list on NYSE in 2009 in a deal that would have given it a market cap of $3.9bn. The company later reduced the value of its offering to $3.2bn before pulling the float altogether. It is frequently compared to public US peer AES, with $4.6bn in Ebitda on $16.2bn of revenues for the last 12 months as of September 30, 2010. It was last trading at a market cap of around $10.22bn.