Pension funds oppose Enel capital increase
March 21, 2019 |
AFP Capital has proposed a smaller share sale to finance the Eletropaulo acquisition but not dilute minority owners
Enel Américas plans to sell $3.5bn in shares on the Santiago stock exchange, but local pension funds are against the deal and have threatened to delay it, LatinFinance has heard.
"There are some institutional investors who oppose the capital increase, but I am not sure they can block it," said an investment banker in Santiago.
Even if the pension funds, or AFPs, as they are called in Chile, do not block the deal, they could still force Enel Américas to delay the share sale, the banker added.
Enel Américas has said that the capital increase is crucial to paying down debt from the acquisition of Eletropaulo in Brazil
But Jaime Munita, CEO of the local pension fund AFP Capital, has said that the planned capital increase is too large and dilutes minority owners.
"The capital increase should be smaller than proposed, so that minority shareholders don't have to finance debt," Munita was quoted as saying in local press reports.
He reportedly added that $2.2bn to $2.6bn is a more appropriate amount to increase Enel's liquidity in Brazil and finance the company's growth in the region without sacrificing its credit status.
Enel Américas, a division of Italian energy company Enel, needs shareholder approval to issue new shares, which it intends offer at a 5% discount on its current price on April 30. Shares in Enel Américas slipped 1.59% to close at CLP121.65 ($0.18) on Wednesday.
Enel outbid Spain's Iberdrola to buy 73.4% of Eletropaulo for BRL5.55bn ($1.47bn) in May last year. Eletropaulo carried out a BRL1.5bn capital increase in September.