Aguas Shares Dip After $1bn Sale

Aguas Andinas stock ended lower on Wednesday after Chilean government entity Corporacion de Fomento de la Produccion (Corfo) raised $979m equivalent through the sale of shares in the water utility. The transaction represented 30% of Aguas Andinas and involved the sale of 1.83bn shares at CLP250 per share, raising CLP457.5bn ($979m). The price came at a 3.8% discount to Tuesday’s CLP260 close before the company’s shares dropped to CLP248.17 Wednesday. Demand reached CLP873.5bn with 14% of the sale going to domestic retail accounts and the remainder to domestic institutional and international buyers. The government keeps a 5 % stake in Andinas, including class B shares that allow it to retain certain veto powers in major decisions going forward. Corfo had initially planned to sell all of its 35% (2.14bn shares) position, but adjusted that amount to 30% during the period leading up to the sale. Banchile, Bank of America Merrill Lynch and IM Trust led. Andinas is 50.1% owned by the Inversiones Aguas Metropolitanas (IAM) vehicle, which is in turn 56.6% owned by Spanish water utility Agbar, which is controlled 75% by France’s GDF Suez. Privatized in 1999, Andinas provides waste and water services in Chile through six subsidiaries. The government got approval late last year for the sale in order to raise funds for use at other state-owned enterprises. It follows January’s $1bn sale of 40% of utility E.CL and is part the government’s plan to meet increased financing needs through asset sales following last year’s earthquake.