Chadbourne & Parke represented Enersis S.A., a Chilean electric utility company with operations in Chile, Brazil, Colombia, Peru and Argentina, in its recently completed US$6 billion capital increase, the largest in Chilean history. Enersis is part of a group of companies controlled by Enel S.p.A., an Italian utility company. Enel owns approximately 92% of Endesa S.A., a Spanish electricity generation and distribution company that own approximately 60% of Enersis. Enersis American Depositary Shares (ADSs) are listed and traded on the New York Stock Exchange.
The capital increase consisted of a US$3.6 billion in-kind contribution by Endesa S.A. to Enersis of interests in 16 operating companies located throughout Latin America and a global rights offering of shares and ADSs that were registered in the US and sold for approximately US$2.4 billion in cash. The cash proceeds from the offering will be used by Enersis for acquisitions. The transaction also consolidates in Enersis the investments of Endesa S.A. in Latin American electricity generation, transmission and distribution companies.
The preemptive rights offering was registered with the SEC, enabling ADS holders to participate in the offering through ADS rights, which were traded on the NYSE, a unique feature for Chilean rights offerings, which typically only provide for the local share rights to trade in the Chilean markets. Ultimately, over 97% of the preemptive rights in the cash portion were exercised and the remaining shares not subscribed for in the preemptive rights offering were subsequently sold in auctions on the Santiago Stock Exchange.
Completion of the transaction was subject to the condition precedent that a sufficient number of shares be subscribed for in the offering by investors other than Endesa S.A. to ensure that Endesa S.A.’s holdings in Enersis did not exceed 65% after giving effect to the in-kind contribution by Endesa S.A.
Chadbourne lawyers were significantly involved in the various stages of this unprecedented transaction, including deal structuring, the proxy solicitation process for ADS holders in connection with the shareholder approval of the transaction and the registration and offering of shares and ADSs in a global preemptive rights offering.
Corporate partners Allen Miller, Sey-Hyo Lee and Margarita Oliva, associates Katie Spencer, Tae Sang Yoo, Coleman Miller and Gabrielle DiBernardi and foreign interns Pablo Salcedo and Gianmarco Tagliarino in New York worked on the transaction. Tax partner William Cavanagh and associate Kevin Prokup also provided tax advice for the transaction.
Chadbourne is the only international firm to score in all six ranking categories for international law firms with Latin America-wide practices in the 2013 edition of Chambers Latin America. With offices in Brazil and Mexico, the two largest markets in Latin America, and a dedicated Latin America practice based in offices in the US and London, Chadbourne is among the premier international law firms serving the Latin America region.
