Tuesday , November 24 2020

These are the issues that the Enel Group has in Latin America



The multinational energy sector Grupo Enel, whose subsidiary in America was the only one who expressed its interest in taking over as Electricariba's new operator and managing the distribution and commercialization of energy on the coast, should not only overcome the obstacle to crossing the participation limit in Colombia but in others Latin American countries also have certain conflicts.

These trade shows have been presented with its partners, shareholders and other companies in the sector, for the strategies it has developed to promote its expansion plan in the region.

In countries such as Chile, Brazil and Argentina, its activities are conducted in the middle of the question. This case is added to Spain, recently published by EL HERALDO, where the UGT Union signals the group to "rob" Endesa and then sell it to the "highest bidder".

operations

In Latin America, it has the presence of energy companies that include unconventional renewable energy sources in countries such as Chile, Brazil, Colombia, Argentina and Peru, through Enel Américas, a subsidiary of the Italian parent company Grupo Enel.

The multinational company arrived in Chile in 2009, when it bought the Acciona rod held in Spanish company Endesa. There were six members of the Board of Endesa Chile sanctioned in the subsidiary Empresa Electrica Pehuenche in 2011 by the Superintendence of Securities and Insurance in the country to sign a power supply contract with the company in 2007.

The sanctions were made to conclude agreements on the sale of energy or the provision of related services (companies in the group they are controlling) on ​​terms that are unfavorable to minority shareholders and lack of transparent information. Same as knowledge of the terms of the contract.

The restructuring processes of the Group's companies in Chile also increased controversies (Plan Carter and Plan Elqui) because the participation of minority shareholders was diluted. In capitalization, they were forced to place millions of resources in cash to maintain their share while the Italians supported their investments with assets. These restructurings ended to devalue minority participation.

More from Chile

Another controversial event, recorded by the El Mercurio newspaper in its release of August 25, 2016, occurred when "Endesa Chile agreed to purchase energy from Enel Green Power (EGP) renewable energy subsidiary today absorbed by Enel- for $ 3,500 million on 25 years and at a price that was around USD114 per MWh without a public tender. "

Additionally, another agreement was signed between the parties in July 2014, which amounted to about $ 2,300 million for 20 years, which would have been "agreed at a price of $ 100 per MWh, while at the Endesa Chile Board the value that determined a Project flows or is not between 80 and 90 dollars per MWh ".

In September of that year, the minority investors in Enel Generación suggested that this company could control EGP to strengthen and develop companies in non-conventional renewables, which was against Francesco Starace, CEO of Enel Italia.

This means that the multinational Grupo Enel only invests in non-conventional renewable energy sources through the EGP, where it has 100% participation and not through its generating companies, where it would need to allocate profits from operations with other investors.

Replacement of brand

One of the latest moves in Chile was the relaunch of its main companies.

In October 2016, the extraordinary general meetings of Enersis Chile, Endesa Chile and Chilectra approved the name of the three companies of Enel Chile, Enel Generación and Enel Distribución. that is, the Chilean traditional brands disappeared from the market.

In Brazil

Enel Enel's latest disputes were this year with Spain's iberdrola power company (through its subsidiary Neoenergía) for control of Electropaulo, Brazil's largest energy distributor, which supplies Sao Paulo.

Iberdrola condemned Enel to the European Commission in Brussels for unfair competition by not acting in accordance with market rules and making use of the Italian Government's support in the bidding war to stay with Electropaulo.

"With the obvious support from the state, Enel clearly benefits from a privileged legislative situation in Italy, making access to the capital market cheaper and easier," said Iberdrola's letter in April this year to the European Commission. .

The newspaper El País in Spain shows in a publication that "Iberdrola reacted with a hard letter to the European Commission, accusing Enel of violating the principles of free competition and exploiting a monopolistic position because of its connection with the Italian state." .

During the bid there was a bid war between the two companies that raised the price per share. Neoenergía initially presented an offer of 29.4 reais (about 7 euros) and later Enel introduced its proposal for 32 reais (7.54 euros). In the following weeks, the offer continued to rise in a tough bid between the two companies.

However, the Italian company was the winner after presenting a higher offer than Neoergia, a subsidiary of Iberdrola. At the last moment, when the deadline for submitting the latest proposals expired, Enel offered 45.22 reais (10.45 euros = for each part of Electropaulo, an offer much higher than that for Iberdrola for 39.53 reais (9.09 euro).

Finally, Enel, through Enel Americas, was provided with 73.38% of Electropaulo, for which the Italian company will pay about $ 1 484 million. In this way, Enel became the largest energy distributor in Brazil, with 17 million customers and 20% market share.

In Argentina

Edesur, a power supply subsidiary of Enel Américas in Argentina, has requested a USD 1,207 million compensation from the Ministry of Energy, according to Chile's El Mercurio newspaper. This compensation would be equivalent to the damage resulting from the breach of the contractor's contract as a result of the freezing of contract prices under the government of Néstor Kirchner.

The requested amount covers a period between 2005 and 2017.

In recent years, Edesur has encountered problems with the provision of the service, motivated by the motivation that the low prices of energy services prevented providing a quality service.

In February last year, in the process of normalizing basic services, such as electricity and gas, initiated by Mauricio Macris administration, Edesur achieved a shift in its fees in a gradual system.

Enel's controversy in Spain

Another of the countries where controversies arise over the Enel Group's actions are Spain. There was a "dividend distribution" and growth strategy for the Group, unlike minority owners, unions and employees in Endesa, where the Enel Group has control.

Endesa is owned by the Enel Group since 2009, which currently has 70 percent of the Spanish company.

The Group decided to distribute 100% of Endesa's earnings and left no reserves for investments and growth of this company. According to Endasas Strategic Plan, published in 2017, 100% of the profit will be distributed in dividends by 2020. This will mean that the Italian multinational countries will be close to EUR 6,000 million over the next three years.

Trade unions for workers and retirees in Endesa protested this year before the Italian Embassy in Madrid and condemned the Enel group's "emptying and flushing" of Endesa with the sole purpose of increasing its income against the company's future Spanish, where they do not invest. They also argue that these resources are used to alleviate Italy's public debt, given that the government has about 25 percent of the Enel Group.

Trade unions have reported a decline in jobs, ranging from more than 11,000 to 8,789 workers.

Spain's information portal argues that the conflict has escalated since 2014 when CEO of Enel, Francesco Starace, who has a more aggressive style.

Another of the disputes is related to the control of the Enel brand of all non-conventional renewable assets, including hydroelectric power plants owned by
Endesa (Endesa brand disappeared). Enel claims that "the brand in all territories for renewable energy sources is Enel Green Power".

What alone says

In the situation with Endesa, Spain, the Enel Group Communications Office replied: "Our CEO, Francesco Starace, has repeatedly denied any intention to sell Endesa."

The rejection of a sale is also reported in the story.


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