Chadbourne Represents Enel Americas in Reorganization of US$22 Billion of Assets in Latin America

Chadbourne & Parke LLP represented Enel Américas S.A. (formerly known as Enersis S.A.), a Chilean electric utility company, in a corporate reorganization transaction to organize all of its electricity generation, distribution and transmission businesses by geographic focus, with one group of companies focused on Chile and the other group focused on Argentina, Brazil, Colombia and Peru. The reorganization, which was first announced in April 2015, was implemented through a series of related transactions that involved splitting three Chilean public companies into six public companies (including four with American Depositary Shares (ADSs) traded on the New York Stock Exchange (NYSE)), conducting parallel tender offers in Chile and the United States, and entering into a three-way cross-border merger to create a NYSE-listed company under the name Enel Américas S.A.  The merger became effective on December 1, 2016.  Following the merger, a separate group of companies, including two other NYSE-listed companies, will continue to conduct Enersis’s businesses in Chile.

The first step of the reorganization involved the separation of the Chilean and non-Chilean electricity generation, distribution and transmission businesses of Enersis and its subsidiaries, Empresa Nacional de Electricidad S.A. (also known as Endesa Chile) and Chilectra S.A., through a spin-off process known as “división” or “demerger” under Chilean law. The second phase of the reorganization involved:

• the statutory merger of two of the spin-off companies, Endesa Américas and Chilectra Américas, with Enel Américas; and
• a dual US and Chilean cash tender offer by Enel Américas for all of the shares and ADSs of Endesa Américas not owned by it that would take place concurrently with the shareholder vote on the merger (as an alternative to the statutory merger withdrawal rights provided under Chilean law).

The spin-offs were approved by the shareholders of the relevant companies in December 2015 and completed in April 2016, resulting in the creation of three new Chilean public companies: Enersis Chile, Endesa Américas and Chilectra Américas. The ADSs of Enersis Chile and Endesa Américas were also registered concurrently with the US Securities and Exchange Commission (SEC) and listed on the NYSE.  The merger was approved by the shareholders of the relevant companies in September 2016 and the tender offer was completed in October 2016.

Following completion of the reorganization transaction:

• Enel Américas is continuing the Enersis group electricity generation, distribution and transmission businesses in Argentina, Brazil, Colombia and Peru; and
• Enel Chile S.A. (formerly Enersis Chile S.A.), Enel Generación Chile S.A. (formerly Endesa Chile) and Enel Distribución Chile S.A. (formerly Chilectra) are continuing the Enersis group electricity generation and distribution businesses in Chile. 

ADSs of Enel Americas, Enel Chile and Enel Generacion Chile are listed and traded on the NYSE under the symbols “ENIA”, “ENIC” and “EOCC”, respectively.

In connection with the reorganization transactions, Enel Américas also issued US$600 million of SEC-registered bonds and entered into a US$1.5 billion international credit agreement.

Chadbourne served as US legal advisor to Enel Américas and its subsidiaries. Chadbourne lawyers were involved in the structuring and implementation of the complex and lengthy reorganization transaction.  The series of interrelated transactions involved extensive coordination of US securities laws and Chilean corporate and securities laws, including compliance of the merger with related-party transaction rules in Chile and of the merger and the tender offer with the SEC’s going-private rules.  The reorganization transaction required extensive discussions with the SEC on several novel legal and accounting matters during its various phases.

Corporate partners Allen Miller and Sey-Hyo Lee, corporate associates Tae Sang Yoo, Jaime Huertas, Yamilet Echeverria, Amanda Sewell, Patrick Narvaez and Constantino Perez Salgado and international attorney Vicente Cordero in New York advised on the transaction. Tax partner William Cavanagh and tax associates Kevin Prokup and Margaret Weil also provided tax advice for the transaction.  Finance partners Vincent Dunn and Scott Berson, finance counsel Joseph Giannini and finance associate Adrienne Sebring advised on the international credit agreement.

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