US-based Sempra Energy is planning to sell its equity interests in its South American businesses, including its 83.6% stake in Luz del Sur in Peru and 100% interest in Chilquinta Energia in Chile.
The company intends to begin the process in March this year.
Luz del Sur is said to be the largest electric company, serving more than 4.9 million consumers in the southern region of Lima, Peru.
It is also active in the development and operation of hydroelectric projects, including its Santa Teresa hydroelectric plant in central Peru.
Meanwhile, Chilquinta Energia is reported to be the third-largest distributor of electricity in Chile.
The utility company serves more than two million consumers in the cities of Valparaiso and Viña del Mar in central Chile. It is also active in the development and operation of electric transmission lines.
Sempra Energy executive vice-president and CFO Trevor Mihalik said: “Our businesses in Peru and Chile are considered some of the most admired and desirable companies in the region.
“We expect this to be a highly competitive process with strong interest from both strategic and financial investors.”
Bank of America Merrill Lynch (BAML) and Lazard will act as financial advisers to Sempra Energy in connection with the planned sale. White & Case will act as the legal adviser.
The deal also includes Sempra Energy’s interests in two energy-services companies, Tecnored and Tecsur, which provide electric construction and infrastructure services to Chilquinta Energía and Luz del Sur respectively.
Sempra Energy anticipates that the sale process to be completed by the end of this year.
Earlier this month, Sempra Energy agreed to sell the remaining wind operating and development assets of its renewables subsidiary to American Electric Power (AEP) for $551m in cash, subject to closing adjustments and working capital.