Chile Continues Water Utility Selldown

Chile’s Corporacion de Fomento de la Produccion (Corfo) has begun investor presentations for the July 15 follow-on sale of shares in water utilities Essbio and Essval, which could raise around $1bn equivalent. Following its $979m sale last month of nearly all of its stake in water utility Aguas Andinas, the government entity is now looking to offload 24.4% of Esval and 38.4% of Essbio, as the Chilean government proceeds with an asset sale plan to help with earthquake recovery-related budgetary needs. The plan, according to a road show presentation, is to offer 10.2bn class A and C Essbio shares, which would raise about CLP264.3bn ($573m) based on Thursday’s closing prices. It also plans to sell 3.62bn Esval class A and C shares, which would raise about CLP361.9bn ($780m) at Thursday’s closing prices. However, each of the share classes are rather illiquid, with Essbio having a 5.4% free float and Esval less than 1%, making size estimations tricky. The auction and the price announcement are both expected July 15. Corfo is set to keep a 5.0% position in each company, both of which are controlled by the Ontario Teachers’ Pension Plan. Banchile, Bank of America Merrill Lynch and IM Trust are managing, the same trio that handled Aguas Andinas.