Enel expands its stake in subsidiary Enel Chile for 3% of the company's capital. The energy giant led by Francesco Starace has stipulated two share swap agreements with a financial institution to increase its stake in the listed Chilean subsidiary. Shareholding which currently amounts to 61,9% of the capital. Enel may acquire, on dates expected to occur within the fourth quarter of 2020, up to 1.763.747.209 ordinary shares of Enel Chile and up to 6.224.990 American Depositary Shares of Enel Chile, each of which is equivalent to 50 of the aforementioned shares ordinary.
"The number of ordinary shares and American Depositary Shares of Enel Chile actually purchased by Enel in the context of the indicated Share Swap transactions will depend on the ability of the financial institution acting as counterparty to carry out the envisaged hedges in the context of the transactions themselves", reads the company's note.
“The consideration for the ordinary shares of Enel Chile purchased by Enel will be based on the prices at which the financial institution will hedge the related Share Swap transaction. As regards the American Depositary Shares, the consideration will instead be based on the volume-weighted average prices of the same American Depositary Shares during the period in which the financial institution will carry out its hedging with respect to the corresponding Share Swap transaction", continues the communicated.
Prior to settlement of the transaction, Enel will not be able to dispose of or exercise voting rights in relation to the ordinary shares or American Depositary Shares of Enel Chile acquired or held by the financial institution as a hedge in connection with the Share Swap Transactions. The consideration that Enel will be required to pay as part of the Share Swap transactions will be financed by cash flows from current operations.
The operation results in line with Enel's 2020-2022 Strategic Plan presented to the markets and which provides for the reduction of the presence of minority interests in the group companies operating in South America. From this news we do not see any significant impact on Enel's stock and consolidated financial data in the short term”, commented the analysts of Banca Imi which have an add rating on the share and a target price of 7,6 euros.
