8-KAcquisitions & DispositionsExhibits & Filings

SEMPRA 8-K Report, Acquisition Completed (Apr 29, 2020)

Filed April 29, 2020For Securities:SRESREA

Summary

Sempra Energy (SRE) announced the completion of the sale of its indirect controlling stake (83.6%) in Luz del Sur S.A.A. and its interest in Tecsur S.A. to China Yangtze Power International (Hongkong) Co., Limited (CYP International). This transaction, valued at an aggregate base purchase price of $3.59 billion, subject to post-closing adjustments, marks a significant divestiture for Sempra. Luz del Sur is a major electric distribution utility serving approximately 4.9 million people in Lima, Peru, and also owns a hydroelectric power plant, while Tecsur provides energy services. This sale is expected to result in a substantial pre-tax gain of approximately $2.3 billion (or $1.5 billion after tax) for Sempra Energy. The company has previously reported the results of these discontinued operations in its 2019 Form 10-K, meaning pro forma financial information for this sale is not required in this 8-K filing. Investors should note this divestiture as it represents a strategic move and a significant financial event for Sempra.

Key Highlights

  • 1Sempra Energy completed the sale of its 83.6% indirect interest in Peruvian electric utility Luz del Sur and its interest in Tecsur.
  • 2The buyer is an affiliate of China Yangtze Power International (Hongkong) Co., Limited (CYP International).
  • 3The aggregate base purchase price for the transaction was $3.59 billion, subject to post-closing adjustments.
  • 4Sempra Energy expects to recognize a significant pre-tax gain of approximately $2.3 billion ($1.5 billion after tax) from this sale.
  • 5Luz del Sur serves approximately 4.9 million customers in Lima, Peru, and owns a 100-megawatt hydroelectric power plant.
  • 6Tecsur provides electric construction and infrastructure services.
  • 7This divestiture is part of a previously announced strategic move, with prior reporting of discontinued operations in Sempra's 2019 10-K.

Frequently Asked Questions

Sempra Energy sold its indirect controlling interest (83.6%) in Luz del Sur S.A.A., a Peruvian electric distribution utility, and its indirect interest in Tecsur S.A., an energy services company. These entities were held through Peruvian Opportunity Company S.A.C. and Sempra Americas Bermuda Ltd.

The aggregate base purchase price was $3.59 billion. This amount is subject to adjustments that will be determined after the closing of the transaction.

Sempra Energy anticipates recognizing a significant gain on the sale. The estimated pre-tax gain is approximately $2.3 billion, which translates to an after-tax gain of about $1.5 billion, subject to final adjustments.

Pro forma financial information is not required because Sempra Energy has already reported the financial results of Luz del Sur and Tecsur as discontinued operations in its Annual Report on Form 10-K for the year ended December 31, 2019. This filing focuses on the completion of the sale itself.