Govt raises US$984mn from sale of Aguas Andinas share

Wednesday, June 15, 2011

The Chilean government has collected some US$984mn through the sale of its 30% stake in the country's largest water utility, Aguas Andinas.

In an auction held on the Santiago bourse, state development agency Corfo sold 1.83bn shares valued at 250 pesos each.

The result indicates a favorable outlook for the agency's sale of its share in three other utilities, according to Felipe Gazitúa, corporate finance analyst at local financial services firm IM Trust.

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"There was a lot of demand - twice what we had on the book - so the rest of the placements should also go well," Gazitúa told BNamericas.

Institutional investors, including private pension fund managers (AFPs) bought 86% of the Aguas Andinas shares, while the remaining 14% went to the retail sector.

The sale was carried out by IM Trust, Banchile Citi Global Markets and Merrill Lynch.

Corfo had initially planned to sell its entire share in the water utility, but later announced it would hold on to a 5% stake that would allow it veto power over operations involving the transfer of water rights and concessions.

The agency also holds 45.4% of utility Essal, 43.4% of Essbio and 29.3% of Esval.

Chile's government announced in December last year it would sell its stake in the four water companies to pay for reconstruction following the massive earthquake that hit the south of the country in February that year. The funds may also be used to support state-owned firms Codelco, Metro and Enap.