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Chile Codelco Refutes Report of Power Company Stake Sale
iconAug 20, 2010 09:36iconCST

SANTIAGO, Aug.19 (Dow Jones)-

Chilean state copper giant Corporacion Nacional del Cobre refuted a Thursday local newspaper report that its selling its 40% stake in power producer E-CL SA (ECL.SN) on the local stock exchange.
El Mercurio newspaper reported earlier Thursday that the miner known as Codelco would auction its E-CL shares on the local stock exchange, a transaction that will likely surpass $1 billion, which would make it the second-largest auction in the exchange's history in terms of volume.
In a statement, Codelco said it hadn't made any decision on the sale of the stake.
The newspaper reported that Codelco contacted several investment banks to handle the sale. The company responded that it had contacted these banks but to "evaluate different strategies."
These so-called strategies include the convinience and timing of a sale and the size of the stake to possibly sell, "should Codelco decide to do it."
The world's largest copper miner added that such a sale would require approval from the company's board of directors.
To finance post-earthquake reconstruction plans, as well as the government's regular fiscal expenses, the administration of President Sebastian Pinera has said it's mulling the sale of non-essential state assets, which could include Codelco's E-CL stake.
French electric company GDF Suez SA (GSZ.FR) holds the controlling stake in E-CL, which was formerly known as Edelnor. So far this year, E-CL's shares have risen 34%.
In recent trading, E-CL was gaining 1.1% to 1,222.00 Chilean pesos ($2.42), while the Ipsa blue-chip index was tumbling 0.6%.
In the past 52 weeks, the electric company's shares have traded at a low of CLP675.00 and a high of CLP1,239.50, while gaining 65.9% over the same period.
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