Duke Energy sells Latin American assets for US$2.4 bn
Being one of the last energy utility companies in the US to still own major investments in overseas power assets, North Carolina-based Duke Energy announced that it has successfully sold its Latin American assets to New York-based private equity firm I Squared Capital and to Chinese state-owned power company China Three Gorges Corp.
The changing regulatory environment, as well as volatility in currency and earnings, has prompted a significant strategic shift in the company resulting in the sale of its Latin American assets, which garnered US$2.4 billion.
The company is exiting the Latin American market to focus on its domestic regulated business, which was further bolstered by the US$4.9 billion acquisition of Piedmont Natural Gas.
“Today marks a significant milestone in the strategic transformation of our company,” said Duke Energy chairman, president and CEO Lynn Good. “We completed these transactions ahead of schedule and are now fully focused on growing our regulated businesses in 2017 and beyond, including the natural gas platform.”
Duke Energy sold its international business in Brazil to China Three Gorges Corp.for approximately US$1.2 billion enterprise value. Meanwhile, the sale of its remaining Latin American assets in Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina to I Squared Capital – first announced in October 2016 – was completed on December 20, 2016 in another US$1.2 billion deal.
The transactions with China Three Gorges Corp. and I Squared Capital are expected to generate available cash proceeds of approximately US$1.9 billion that will be used to reduce Duke Energy holding company debt.
China Three Gorges Corp. is acquiring Duke Energy’s 10 hydroelectric generation plants, which include eight plants totaling 2,057 MW on the border between Sao Paulo and Parana states; and two plants totaling 33 MW on the Sapucai Mirim River in Sao Paulo state.
Duke Energy still holds a 25% equity stake in National Methanol Co., a Saudi Arabian regional producer of methanol and methyl tertiary butyl ether (MTBE), a gasoline additive.