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I Squared Capital to Exit Orazul Energy Perú via Strategic Sale to ISA for US$158.5m

25 August 2020

I Squared Capital has exited Orazul Energy Perú, owner of companies Etenorte and Eteselva, which operate six transmission lines in Peru, via a US$158.5m sale to ISA Group.

(Press Release) The purchase was performed through the Group’s affiliate ISA Perú once the closing conditions were met, such as the authorization by the National Institute for the Defense of Competition and Protection of Intellectual Property (INDECOPI) of Peru.

The companies are purchased on a debt/cash free basis for USD 152 million. At the closing date, as reported by the seller, the cash balance of these companies is USD 6,5 million, with no financial debt, so the total disbursement amounts to USD 158,5 million. The six concessions located in central and northern Peru in the departments of Ancash, Cajamarca, Huánuco, Lambayeque, and Uyacali operate in the Peruvian Primary Transmission System (SPT) and Secondary Transmission System (SST).

The 220/138 kV line circuits, which cover 746 km, represent 2,4% of energy transmission revenues in the Peruvian market, with which the Group’s share in the market increases to 73%, consolidating it as the largest energy transmission company in the country.

“Peru is one of the key countries for our strategy to 2030 and this purchase allows us to continue strengthening our position in the energy transmission sector in that country. Peru’s energy sector has grown in recent years and for us it is key in the future design of regional integration. We know that these times are challenging for Peru and Latin America due to this pandemic, but this purchase is a clear demonstration of ISA’s confidence and commitment to continue generating connections,” Bernardo Vargas Gibsone, ISA Group’s CEO, said.

Scotiabank acted as financial advisor to ISA Peru. Also, Estudio Echecopar -a member of Baker & McKenzie International in Lima- together with Baker & McKenzie’s New York office were in charge of the legal advisory in this transaction.

About ISA Perú

ISA Perú is 100% owned by the ISA Group and operates the Oroya-Carhuamayo-Paragsha-Derivación Antamina 220 kV Transmission Lines, with 262 km in length, and the Aguaytía-Pucallpa 138 kV Transmission Line, with 131 km in length. Through this company, Consorcio Transmantaro, and Red de Energía del Perú, ISA operates around 12.000 km of lines across 22 regions, benefiting more than 21 million Peruvians and positively impacting 1.957 communities along the lines.

ISA’s most important projects under construction in Peru include the Mantaro-Nueva Yanango-Carapongo and Nueva Yanango-Nueva Huánuco connections, which will enter into operation at the end of 2021 and will benefit central and southern Peru.