Inline with its plannedexit from its international energy business, entered into a pairof deals Oct. 10 to sell its Latin American holdings to andI Squared Capital forabout $2.4 billion in combined cash and assumed debt.
DukeEnergy owns 10 hydroelectric plants, totaling 2,090 MW, in Brazil, according toan Oct. 10 news release. The company had earlier lower demand for electricity inBrazil for the second-quarter 2015 decline of earnings in its internationalbusiness. Thoseassets are to be sold to China Three Gorges Corp. for about $1.2 billion.
"Thisis another important step forward in driving our strategy to focus on our coredomestic regulated business, and it builds on our of ,"Duke Energy President, CEO and Chairman Lynn Good said. The company plans touse proceeds for this transaction to reduce its holding company debt.
Lateron Oct. 10, Duke said it had also agreed to sell the remainder of its LatinAmerica portfolio outside of Brazil to private equity firm I Squared Capitalfor $1.2 billion, including the assumption of debt.
ISquared will buy Duke's hydroelectric and natural gas-fired generation,transmission and natural gas processing assets in Peru, Chile, Ecuador,Guatemala, El Salvador and Argentina, which total about 2,300 MW.
"Ourstrategic transformation is gathering more momentum as we exit the LatinAmerican market to focus on our domestic regulated core business, which wasbolstered by our recent Piedmont Natural Gas acquisition," Good said in aseparate news release. "It's also a clear win for I Squared Capital andChina Three Gorges Corporation, which are acquiring quality operations. We lookforward to working with them to close the transactions."
Thedeals are subject to regulatory approvals in Brazil and China and othercustomary closing conditions, and are expected to occur in two to four months.
Duke'sfinancial advisers are Credit Suisse and J.P. Morgan. Its legal adviser isSkadden Arps Slate Meagher & Flom LLP.