INFRA OPPORTUNITIES

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Over in Chile, the state economic development agency (CORFO) has raised nearly $1 billion from the successful public sale of a 30% stake in its largest water utility, Aguas Andinas.

 That did not stop the government from changing its mind at the last minute on the size of the stake it wanted to off load. In order to retain the power to veto major decisions at Aguas Andinas, the government realised it needed to maintain a majority of class ‘B’ shares, and announced on the eve of the international roadshow that it would be maintaining a 5% stake. The announcement came too late for the roadshow team, and the deal f lyers were printed with the original amount still showing.

 
* The Aguas Andinas auction paves the way for the sale of the majority of CORFO’s stakes in three smaller utilities – Essbío, Esval and Essal. Ontario Teachers’ Pension Plan has held majority stakes in the first two since 2007, and may choose to exercise its right of first refusal to buy up the remaining shares on offer.
 
* Suez Environnement’s Spanish subsidiary Agbar is selling a majority interest in Bristol Water, its UK subsidiary. It brings Agbar into line with Suez’s asset-lite strategy (the French company generally prefers to make money from operations rather than owning water systems outright). With the exception of Bournemouth & West Hampshire Water, which was part of the Cascal portfolio acquired by Sembcorp last year, we have not seen a regulated UK water company change hands since the financial crash in 2008. It will be an interesting barometer of the market. Are the Japanese trading houses more hungry than the infrastructure funds?