The potential sale of the 40% stake held by Chile’s state copper company Codelco in the Edelnor generation JV could raise US$875mn, according to investment bank Celfin.
Chile’s President Sebastián Piñera added to speculation that the sale would go through during a summit on nuclear weapons in the US earlier in the week, when he suggested that Chile was “considering the sale of an energy unit of Codelco.”
The funds would go towards earthquake reconstruction, which could end up with a total price tag of US$30bn. Piñera has said the country will attempt to raise US$10bn to repair damage resulting from the massive February 27 quake.
Celfin expects that the sale of state assets would have minimal impact on the country’s macroeconomic indicators.
“We continue to expect the funding mix to be a combination of tax increases, repatriation of some of the savings held abroad, debt issues in international markets, and modifications to the 2010 budget to redirect funds to the hardest-hit regions and sales of assets,” Celfin said in a research note. “Throughout, we expect Chile’s government to take care to avoid pressure on interest rates or the exchange rate, and in this context, the sale of assets appears as a practical ingredient.”
European energy group GDF Suez controls a 52% stake in Edelnor, while minority shareholders hold the remainder. One of the group’s subsidiaries, Electroandina, supplies power to the Codelco Norte Division through a 15-year contract.
There have been concerns at Codelco that any sale of its share in Edelnor could raise power prices and increase the company’s operational costs.
The company denies rumors of a sale.
“The decision of any asset sale is made by the company’s board of directors, taking into account the interests of the company,” a Codelco spokesperson told BNamericas. “The board makes these decisions, not the president of the country.”
The government, meanwhile, has said that Codelco will remain 100% public.
The Celfin report also suggests that any sale of Codelco’s share in Edelnor might include a sale of its 50% stake in the GNL Mejillones LNG facility.
