IFC acquired an 11 per cent equity interest in HTC

International Finance Corporation (IFC), has acquired an 11 per cent equity interest in Chilean electricity company HQI Transelec Chile S.A. (HTC), from its main shareholder, Inversiones HQI Chile Holding Limitada, a member of the Hydro-Québec group. The US$60 million deal was closed on April 30.

The move was prompted by HTC?s need for fresh capital, and the IFC?s policy is to have an equity collateral or interest in their financing. The IFC will be entitled to appoint one director out of a total of five as a result of the deal. Furthermore, the IFC required HTC to create a new series of shares with preferred dividends especially for the transaction. The IFC will be paid its dividend in preference to other shareholders and its dividend, if there are net profits, will consist of a fixed amount. HQI Transelec Chile is reportedly the largest electricity transmission company in Chile.

Guerrero, Olivos, Novoa y Errazuriz represented Hydro-Québec, HQI Transelec Chile SA and Inversiones HQI Chile Holding Limitada, through a team led by partner Roberto Guerrero V, and including partner Gonzalo Delaveau and associates José Miguel Ried and Cristián Fabres. Hydro-Québec was advised in-house by Nathalie Briere and Michel Simard.

Partner Antonia Stolper, and associate Mimma Barila, of Shearman & Sterling, provided US counsel to HQI Transelec Chile SA and Inversiones HQI Chile Holding SA.

Partner Enrique Prieto, and associates Pablo Bauer and Paulina Riquelme, of Urenda, Rencoret, Orrego y Dörr, advised International Finance Corporation in Chile. It took US counsel from partner Peter Hosinski and associate Santiago Lucero, of Becker, Glynn, Melamed & Muffly LLP. Marina Feldman acted as in-house counsel for International Finance Corporation.