Chile: Energy sector questions Enel’s reorganization, ask FNE to get involved

Two months after the energy company Enel Chile informed Chilean authorities that they would begin a process of asset reorganization (ordered by the parent company in Italy), critics of the restructuring have emerged among minority shareholders, requesting the involvement of competition authorities.

First it was Pehuenche Electric, a minor shareholder, who requested the appointment of an arbitrator to settle disputes with the Enel. However, changes in the market have brought new uncertainties, linked to the relevance of the offer made by Enel Generación in the last bidding process to regulated customers, where 54% of the contract was awarded at an average price of only US $34.7 per MWh.

According to a former senior executive and shareholder at the firm, the fact that Enel has decided to go to auction with those prices while in the middle of a reorganization, is “reckless”, since when bidding for prices 30% lower to the standard rate, it makes the market believe that it is devaluing the company.

Furthermore, sector experts have remarked on Enel bidding at a price that it doesn’t even offer its customers, a technique aimed at ‘liquidating’ any possible competitors. Some shareholders have even proposed that the National Economic Prosecutor’s Office (FNE) should investigate the reasons behind the low prices.

Full Content: La Tercera

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