Canadian pension funds including Canada Pension Plan Investment Board are considering selling their stakes in Chile’s biggest power-transmission company Transelec SA, seeking a combined $3 billion, according to people familiar with the matter.
(Bloomberg) — Canadian pension funds including Canada Pension Plan Investment Board are considering selling their stakes in Chile’s biggest power-transmission company Transelec SA, seeking a combined $3 billion, according to people familiar with the matter.
CPPIB, British Columbia Investment Management Corp. and Public Sector Pension Investment Board are in the early stages of evaluating a potential sale of their roughly 72% stake in the Santiago-based utility, the people said, asking not to be identified because the matter is private.
Potential suitors could include China Southern Power Grid Co., which already owns almost 28% of Transelec as the single biggest shareholder, the people said. Other companies in the industry and investment funds may also be interested, according to the people. Considerations are preliminary and the pension funds could still decide against pursuing any deal, they added.
Representatives for the Canadian pension funds declined to comment, while a representative for China Southern Power Grid didn’t respond to requests for comment. Transelec couldn’t be immediately reached for comment outside business hours.
Transelec is the main supplier of high voltage systems in Chile, with more than 10,000 kilometers (6,200 miles) of power lines across the country, according to its website.
Canada’s alternative asset manager Brookfield was part of a group that bought Transelec for about $1.7 billion from Hydro-Quebec and an affiliate of the World Bank Group in 2006. The Canadian pension funds comprise the remainder of the consortium. Brookfield sold its about 28% stake to China Southern Power Grid for about $1.3 billion in 2018.
CPPIB is Transelec’s second largest shareholder with a 27.73% stake, while BCI and PSP hold 26% and 18.48% respectively, the website shows.
–With assistance from Paula Sambo and Kathy Chen.
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