August 19, 2010 / 5:05 PM / 9 years ago

UPDATE 1-Codelco mulls power unit stake sale, no decision

* Codelco evaluates “convenience” of sale

* Denies news report it has already decided on stake (Recast with company comments on possible sale)

SANTIAGO, Aug 19 (Reuters) - Chilean state copper giant Codelco [CODEL.UL] said on Thursday it is evaluating options for a possible sale of its 40 percent stake in local energy company E-CL END.SN, valued around $1 billion.

Codelco denied a report by local daily El Mercurio that it had already decided to move ahead with its sale in E-CL EDN.SN, which is the country’s fourth largest power generation firm and is majority owned by GDF Suez GSZ.PA.

The company said “it has contacted international investment banks and local financial institutions to advise Codelco during the first stage in which it will evaluate the convenience and opportunity for a sale.”

El Mercurio reported Codelco had opted to sell the stake via a public auction in the local bourse without citing sources.

Shares in E-CL were 1.07 percent higher at 1,222 pesos, paring steeper gains earlier triggered by the report.

A Codelco board member told Reuters earlier the company didn’t expect to decide on the stake sale this year as it has enough financing for its expenses this year.

A board member who was not permitted to speak publicly and declined to be named said the board had the final say on the sale.

President Sebastian Pinera said this year Codelco could sell some assets to help finance the reconstruction of cities and industries ravaged by a massive February quake. His government is evaluating the sale of other state assets.

El Mercurio said Codelco already had a short list of banks to arrange the sale, which included Citigroup (C.N), JP Morgan (JPM.N), Celfin and LarrainVial.

E-CL EDN.SN has a market value of $2.56 billion and its shares have climbed 34 percent this year, according to Reuters data. ($1= 501.60 Chilean pesos) (Reporting by Alonso Soto; Editing by Sofina Mirza-Reid)

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