Essal Close to Sale Decision

Chile’s Essal water utility is close to making a decision about a possible M&A deal or an IPO, perhaps as soon as the next 3-4 weeks, a person familiar with the matter says. Options include a public offering of shares or a block sale to strategic partners, as government entity Corporacion de Fomento de la Produccion (Corfo) looks to reduce its 45% position to about 5%. Timing of a public transaction would depend on market conditions improving. A sale would follow the pattern set in public share offerings this year from fellow water utilities Essbio and Esval. In July, Corfo raised CLP260.64trn ($564m) from the sale of all but 5% of each of the pair, as part of a plan to help with budgetary needs created by last year’s earthquake. That transaction followed an $879m exit from Aguas Andinas. Aguas Andinas owns 54% of Essal. Banchile, Bank of America Merril Lynch and IMTrust, the same trio that managed Aguas, Essbio and Esval, are working with Essal.