Bidders circle Sempra’s Peruvian distribution company 

24 June 2019 - 12:00 am UTC

Several international firms are interested in acquiring Sempra’s Peruvian electricity distribution and generation company Luz del Sur, according to multiple sources briefed. 

According to three sources following the process, interested bidders for Sempra’s 83.74% stake include: 

One of the sources said that companies are submitting indicative bids already and the deadline is the end of June. 

Singapore’s GIC and OMERS Infrastructure were also reportedly interested in the Luz del Sur auction, according to the same source. The source pointed to the relationship that they have with Sempra from Texas, where OMERS and GIC hold 20% of Sempra’s electric utility Oncor. Sempra bought 80% of the company for USD 9.45bn in March 2018 from the then bankrupt Energy Future Holdings.

A second source briefed said that whoever buys Luz del Sur may have to divest some of the company’s electricity generation assets as Peruvian law prohibits having generation and distribution under the same umbrella. 

Luz del Sur owns the 91MW Santa Teresa hydroelectric plant in the north of the country and potential bidders like iSquared could potentially have trouble with Peruvian regulators because they own Peruvian generation assets through subsidiary company Inkia, which it acquired in December 2017. 

Luz del Sur distributes energy to over 4.9m customers in the southern region of Lima and is Peru’s largest electricity company. The company also owns the 91MW Santa Teresa hydroelectric plant.

Sempra Energy made its original acquisitions of approximately 50% of Chilquinta Energía and approximately 42% of Luz del Sur in 1999.

In 2011, Sempra Energy acquired its partner’s stakes in the Latin American utilities, resulting in 100% ownership of Chilquinta Energía and majority ownership of Luz del Sur.

 

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