Enel to sell stake in LaGeo to government in El Salvador
Following a long litigation process between Enel and the Salvadoran Government over ownership, Enel has decided to sell its 36.2% stake for $280 million.
Local news from El Salvador state that The Italian company Enel Green Power SpA has decided to cease operations in El Salvador and has agreed to sell its 36.2% of its shares in LaGeo, in a transaction that will total $ 280 million. This is part of an agreement reached between Enel Green Power and the Salvadoran Government.
The reason behind this operation can be traced back to 2008 when Enel decided to take the country to international arbitration because the firm was denied the opportunity to invest $ 100 million in LaGeo and exceed 50% of equity ownership in the company. After years of legal battles, a Paris arbitration court granted the right to Enel in 2012 to invest and take ownership and ordered El Salvador to approve of investment and call shareholders to raise the participation of Italians in the company. Since then, Enel has decided to divest completely on the project by selling the reminder of the shares.
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Source: La Prensa Gráfica