Endesa Tweaks Enersis Follow-on

Spain’s Endesa has set new terms for the controversial equity follow-on it has been preparing for its Enersis unit, resulting in a new CLP2.84trn ($5.96bn) valuation size that pleases Chile’s pensions. The electricity holdco plans to offer 16.44bn shares at CLP173.00 per share, it says. Shares closed at CLP167.26 Friday. The new total is at the low end of the $5.92bn-$6.56bn range Endesa had put out after scaling back from an original $8.02bn. The reduction comes after minority holders, namely the pension funds, objected to the valuation of assets Endesa plans to contribute to Enersis to subscribe its share of the capital increase. Regulators also flagged a conflict of interest. In addition to simplifying Enersis’ complicated structure, Endesa is looking to reduce the gap between its Ebitda and net income, as well as reduce dividend leakage within the Enersis group. The operation could also increase the liquidity of Enersis shares, and give it more cash to continue making acquisitions and developing projects in the region. Shareholders will vote on the new plan December 20. The sale must take place within six months of approval.