Sempra Energy, operator of the Cameron LNG plant in Louisiana, sold its majority stake in the Peruvian power distribution company Luz del Sur to China Yangtze Power International for $3.59 billion in cash and also signed a liquefied natural gas supply accord with China Yangtze’s parent company.
Sempra said it sold its 83.6 percent stake in the Peru power company whose business includes supplying customers in the capital Lima with electricity.
Sempra added that its LNG unit had entered into a memorandum of understanding with China Three Gorges Corp., China Yangtze’s parent, regarding potential cooperation in supplying LNG to support demand growth in China.
“Ultimate participation remains subject to finalization of a definitive agreement, among other factors,” said Sempra.
“This initial agreement with China Three Gorges represents an opportunity to support strong growth in natural gas demand in Asia, with future expansions of our LNG projects right here in North America,” said Jeffrey W. Martin, Chairman and Chief Executive of Sempra Energy.
Proceeds from the sale of the Luz del Sur utility will be used to strengthen Sempra’s balance sheet and meet the growing capital needs of its core utilities in California and Texas.
The Peruvian sale will also include Sempra Energy's interest in Tecsur SA, which provides electric construction and infrastructure services to Luz del Sur and third parties, and Inland Energy SAC, Luz del Sur's generation business.
“The sale is expected to be completed in the first quarter of 2020, subject to customary closing conditions, including approval by the Peruvian anti-trust authority and the Bermuda Monetary Authority,” said Sempra in relation with privately held Luz del Sur with Bermuda links.
The San Diego, California-based company said that an active sales process was continuing for Sempra’s electricity businesses in Chile, including the company's 100 percent stake in Chilquinta Energía SA and Tecnored SA.
Sempra expects to announce an agreement on the Chilean asset sale in the fourth quarter of 2019.
The US company said BofA Merrill Lynch and Lazard acted as financial advisors to Sempra Energy on the sale of the Peruvian business to China Yangtze and White & Case acted as legal advisors.