Sempra Mexico Heard Close to Launch

Sempra Mexico has initiated pre-education meetings with investors, ahead of an IPO that could launch as soon as this week and price later this month, according to people familiar with the matter. The size remains to be determined, though a deal of at least MXP5bn ($394m) is expected. The carve-out sale should represent 15%-20% of the capital of the Mexican unit of US-based Sempra energy. The IPO would be the country’s first public equity offering in the energy sector. Citi, Credit Suisse and Deutsche Bank are managing the local and international portions, joined by BBVA Bancomer on the domestic tranche. The issuer is seeking funds for general corporate purposes, investments and expansion. The issuer raised MXP5.2bn in 2018 and 2023 domestic bonds last month, the first Mexican local bond deal by a non-government energy sector entity. In October, Sempra Mexico won a 25-year contract to build and operate a pair of gas pipelines in the state of Sonora, which should require a $1bn investment. Sempra operates five gas pipelines and a regasification terminal in Mexico, and derives about 60% of its revenues from CFE contracts. The company plans to change its name to Infraestructura Energetica Nova, according to a regulatory filing.