San Diego-based Sempra Energy announced Monday that it has entered into an agreement to sell equity interests in its Peruvian businesses to China Yangtze Power International Co. for $3.59 billion.
In the agreement, Sempra will sell its 83.6% stake in Peruvian utility company Luz del Sur along with its interest in Tecsur S.A. — which provides electric construction and infrastructure services to Luz del Sur and third parties — and Inland Energy S.A.C., Luz del Sur's generation business.
"(Today's announcement) directly supports our mission of building North America's premier energy infrastructure company," Sempra CEO Jeffrey W. Martin said. "Proceeds from this transaction will be used to strengthen our balance sheet and meet the growing capital needs of our core utilities in California and Texas."
The sale is expected to be completed in the first quarter of 2020, subject to customary closing conditions including approval by the Peruvian antitrust authority and Bermuda Monetary Authority, according to Sempra.
Luz del Sur serves the southern region of Lima, Peru.
Sempra also announced Monday that its subsidiary Sempra Liquefied Natural Gas has entered into a memorandum of understanding with China Three Gorges Corp., the parent company of China Yangtze Power, regarding potential cooperation in supplying liquefied natural gas to support demand growth in China.
"This initial agreement with (China Three Gorges) represents an opportunity to support strong growth in natural gas demand in Asia, with future expansion of our (liquefied natural gas) projects right here in America," Martin said.
