Sempra Sells Peruvian Business to Chinese Firm
Sempra Energy has entered into an agreement to sell its equity interests in its Peruvian businesses, including its 83.6% stake in Luz del Sur, to China Yangtze Power (CYP). for $3.59bn in cash, it said September 30.
Company CEO Jeffrey W. Martin said the agreement supports the company’s aim of building its North American business. “Proceeds from this transaction will be used to strengthen our balance sheet and meet the growing capital needs of our core utilities in California and Texas," he said.
The sale will also include Sempra Energy's interest in Tecsur, which provides electric construction and infrastructure services to Luz del Sur and third parties, and Inland Energy, Luz del Sur's generation business.
The sale is expected to be completed in Q1 2020, subject to customary closing conditions, including approval by the Peruvian anti-trust authority and the Bermuda Monetary Authority, Sempra said.
Sempra said that an active sales process continues for Sempra Energy's electric businesses in Chile, including the company's 100% stake in Chilquinta Energia and Tecnored. The company expects to announce an agreement in Q4 of this year.
Meanwhile, Sempra also announced that its subsidiary Sempra LNG has entered into a memorandum of understanding with China Three Gorges Corporation (CTG), the parent company of CYP, regarding potential cooperation in supplying LNG. Ultimate participation remains subject to finalisation of a definitive agreement, among other factors, it said.
"This initial agreement with CTG represents an opportunity to support strong growth in natural gas demand in Asia, with future expansions of our LNG projects right here in North America," said Martin.