Antofagasta Sells its Water Division For $960 Million

Antofagasta (LSE:ANTO) announced Thursday that it would sell its water division, Aguas de Antofagasta S.A. to Empresas Públicas de Medellín for $960 million before taxes and transaction costs. CIBC world markets stated in a note that it believed the sale “will allow the company to focus on its core business of mining and the improved balance sheet strength adds flexibility on how it advances its development projects.”

As quoted in the press release:

The sale is subject to certain standard conditions and the approval of Empresa Concesionaria de Servicios Sanitarios S.A (ECONSSA), the grantor of the water concession, and is expected to be completed by the end of May 2015.

ADASA provides potable desalinated water to domestic and commercial customers under a 30 year concession in Chile’s Antofagasta region. The division contributed $63.6 million to the Group’s 2014 profits before tax, with EBITDA of $75.1 million. The gross assets of the division as of 31 December 2014 are $212.4million.

EPM is an electricity, gas, water and sanitation provider owned by the city of Medellín that delivers these services to over 20 million people in Colombia, El Salvador, Guatemala, Mexico and Chile.

Antofagasta CEO, Diego Hernandez, said:

We are very pleased to announce the sale of ADASA to EPM following a formal competitive sale process. This sale will allow Antofagasta to focus even more closely on its mining business and to advance its various development projects, whilst reinforcing the strength of our balance sheet.

Click here to read the Antofagasta (LSE:ANTO) press release