Other people’s money

27 July 2012 By Raul Gallegos

The troubled Italian utility is using an $8 bln capital hike at its Chilean unit Enersis to grow in the region. While Enel’s Spanish arm Endesa kicks in assets to cover its 60 pct portion, minority holders must stump up cash. They may be powerless but the reaction speaks volumes.

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Shares in Enersis, a Chile-based regional energy group, plummeted 13 percent on July 26, a day after it announced it will ask its shareholders to approve a capital increase of up to $8.02 billion.

Spanish power utility Endesa, which owns some 60 percent of Enersis, could participate in the planned capital increase by handing to Enersis up to $4.86 billion in assets. Minority shareholders are expected to shoulder the rest.

Enersis also reported on July 26 that its net profit sank 41.5 percent between April and June compared with the same period last year, due to lower average energy prices as well as higher fuel and transport costs.

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