San Diego–based Sempra Energy has agreed to sell its equity interests in its Peruvian businesses, including its 83.6 percent stake in Luz del Sur to China Yangtze Power International (Hongkong) Co., for $3.59 billion in an all-cash deal.
Luz del Sur serves the southern region of Lima, Peru, and is the largest electric company in the country.
The sale is subject to closing adjustments for working capital and net indebtedness.
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 S.A.C., Luz del Sur’s generation business.
The sale is expected to be completed in the first quarter of 2020, subject to customary closing conditions, including approval by the Peruvian antitrust authority and the Bermuda Monetary Authority.
Jeffrey Martin, chairman and CEO of Sempra Energy, said proceeds will be used to “strengthen the company’s balance sheet” and meet the growing capital needs of its core utilities in California and Texas.
An active sales process continues for Sempra Energy’s electric businesses in Chile, including the company’s 100 percent stake in Chilquinta Energía and Tecnored S.A. The company expects to announce an agreement in the fourth quarter of this year.
In addition, Sempra Energy’s subsidiary Sempra LNG has signed a memorandum of understanding with China Three Gorges Corporation (CTG), the parent company of CYP, regarding potential cooperation in supplying LNG to support demand growth in China. CYP is a subsidiary of China Yangtze Power Co., the largest publicly listed power company in China with a market capitalization of $58 billion.
“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.
Sempra Energy has the largest customer base of any utility holding company in the United States. The company targets attractive markets in California, Texas and Mexico, as well as the LNG export market. The company had more than $60 billion in total assets as of 2018.