UPDATE 3-Endesa, Chile fund agree to $5.963 bln Enersis cap hike

Fri Dec 7, 2012 5:12pm EST

* Figure on low end of new range Enersis had set for cap
hike
    * Deal puts Enersis cap hike share price at 173 pesos
    * Shareholders to vote on controversial hike Dec. 20


    By Felipe Iturrieta
    SANTIAGO, Dec 7 (Reuters) - Spanish energy firm Endesa SA
and Chilean pension funds reached an agreement that puts
regional energy group Enersis SA's planned capital increase at
$5.963 billion, Endesa said on Friday, effectively ending the
controversy over the operation. 
    Chile's private pension funds, which account for Enersis'
largest group of minority shareholders with a combined stake
around 13.63 percent, had stridently opposed Enersis' originally
planned capital hike -- originally put at $8.02 billion.
    The agreed amount is on the low end of the range of $5.915
billion to $6.555 billion that Enersis had subsequently scaled
back to.
    Under the agreement, around 16.441 billion shares of Enersis
 will be released at 173 pesos per share. Enersis shares
closed at 167.26 pesos per share on Friday.
    Enersis is set to ask shareholders to approve on Dec. 20 the
share issue intended to fund acquisition opportunities and raise
stakes in firms it which it already owns stakes.
    "We consider this proposal to be beneficial for all
shareholders and our clients," Chile's pension funds said in a
joint statement on Friday. 
    Endesa calculated the capital increase at $5.963 billion,
using Thursday's exchange rate of 477 pesos per U.S. dollar, it
said in a statement to the regulator on Friday. It put the value
of the assets it will bring to the share increase at $3.615
billion.
    A previous statement from Chile's pension funds did not
include an amount for the capital increase. Using Friday's
exchange rate, the capital increase reaches $5.95 billion.
 
    
 
    
    The private pension funds had expressed skepticism about
Enersis' plans to use the proceeds, and they had also suggested
the operation might be aimed at helping Endesa's parent
company, Italy's Enel, Europe's most indebted utility.
 
    Opposition from minority shareholders, especially the
pension funds, had prompted Chile's regulator to step in and
impose conditions on the deal. 
    The pension funds argued assets that Enersis' parent
company, Endesa, planned to use to subscribe to its portion of
the share issue were overpriced. Endesa plans to swap Latin
American assets that it owns for shares issued in the capital
hike. 
    Among other things, the group of pension funds, including
AFP Capital, AFP Planvital and AFP Habitat
, wanted to know how Enersis' board members came to the
revised price for the Endesa assets.
    While the new price Enersis put forward for the assets
represents an 18 to 26 percent discount from the initial
disputed valuation of $4.86 billion, it is still higher than the
price tag the pension funds sought. 
    Shares in Enersis closed 1.23 percent stronger on Friday,
outperforming a 0.07 percent fall on the wider blue-chip IPSA
 stock index.
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