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UPDATE 2-Enersis shareholders OK Chile's biggest cap hike ever
December 20, 2012 / 7:00 PM / 5 years ago

UPDATE 2-Enersis shareholders OK Chile's biggest cap hike ever

* Cap hike destined to fund acquisitions, raise stakes in firms

* Capital increase set at nearly $6 billion

* Enersis positioned as leading regional energy group

* Approval comes after months-long battle, hike first set at $8 bln

By Anthony Esposito and Felipe Iturrieta

SANTIAGO, Dec 20 (Reuters) - Shareholders of Chile’s Enersis on Thursday approved a controversial planned capital increase of nearly $6 billion, the biggest in the country’s history, that will position Enersis as the region’s leading energy group.

The approval comes after a months-long tussle between Chile’s powerful pension funds and Enersis over the amount of the capital hike, intended to fund acquisition opportunities and raise stakes in firms in which it already has a participation.

The increase was originally set at $8.02 billion, but minority shareholders argued that assets Enersis’ parent company, Spanish energy company Endesa, planned to use to subscribe to its portion of the share issue were overpriced.

Shareholders on Thursday approved the proposal to release around 16.441 billion shares of Enersis at 173 pesos each. Enersis shares closed at 173.75 pesos on Thursday.

“AFP Capital (pension fund) decided to approve Enersis’ proposed capital increase under the conditions presented today during the shareholders’ meeting,” AFP said in a statement. “The capital increase can be analyzed as being beneficial for both parts,” it added.

Of the total, Endesa will subscribe to almost 10 billion shares in exchange for a number of its Latin American assets, which it had valued at around $3.6 billion.

Endesa has said it hoped Enersis will complete the capital increase during the first half of 2013.

“We’ve re-ordered the situation,” Endesa Chairman Borja Prado told reporters at the end of the meeting. “We’ve defined an investment vehicle for Latin America and we want to make it grow.”

Enersis will use part of the increase to make acquisitions in Brazil, Colombia and Peru, Endesa said earlier this month. The company has energy generation, transmission and distribution operations in Argentina, Brazil, Colombia, Chile and Peru.


Private pension funds had also expressed skepticism about Enersis’ plans to use the proceeds, suggesting 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.

Thanks to the operation, Enersis will have the biggest market capitalization of Santiago’s blue-chip IPSA stock index.

Shares in Enersis closed 0.36 percent weaker on Thursday, underperforming the IPSA, which ended broadly flat.

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