Tractebel withdraws US$167mn Egasa, Egesur offer

Bnamericas Published: Thursday, January 16, 2003
Belgian energy company Tractebel has pulled out of a US$167mn agreement to buy Peruvian generators Egasa and Egesur, Peru's economy minister Javier Silva Ruete told local newspapers Thursday. "It was obvious that Tractebel was not going to wait indefinitely," Peru's economy institute (IPE) said in a statement. "We regret that the regional government of Arequipa did not change its position after repeated calls from Tractebel to reach an agreement," the IPE statement continued. It will be difficult for the state government to obtain a similar price in the future, and the people of Arequipa will suffer from a lower quality and more expensive service, IPE said. Tractebel said in December it would keep its offer for the Arequipa province generators on the table indefinitely, but decided not to renew its offer when it came up for renewal this week. Tractebel agreed in June to buy the generators for US$167mn, but following violent protests and the start of a legal investigation into the sale, did not sign contracts or pay any money, and did not have any obligation to go through with the purchase. Peru's Constitutional Tribunal (TC) was due to rule on the privatization, since Arequipa's Supreme Court was unable to reach a decision in October on an injunction brought by Arequipa mayor Juan Manuel Guillen. The main bone of contention was whether or not 10% of Egasa shares belong to the Arequipa province or the state. If they belong to Arequipa, the province could block the sale to Tractebel. Meanwhile, Tractebel is looking at other investment options in Peru including the 130MW Yuncan hydroelectric project in the Pasco region to the northeast of capital city Lima. But state privatization agency Proinversion postponed the January 17 deadline to receive bids indefinitely, saying that an advising investment bank had advised that the bidders needed more time to "finish their analyses," Proinversion said in a statement. Proinversion announced the postponement Wednesday on the eve of a general strike planned by Pasco's regional government, which has taken a similar position to Arequipa against Yuncan's privatisation. Also in Peru, Tractebel is looking at the Camisea LNG export project led by US-based Hunt Oil.

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