‘Negative reaction’ expected as Colbun enters Peru

The entry of Chilean power generator Colbàƒºn into the Peruvian market will generate a drop in share value, according to investment bank Santander Global Corporate Banking.

Through a consortium, the firm has acquired 100 per cent of Fenix ࢀ‹ࢀ‹Power Peru, which owns a 570 MW combined-cycle gas-fired plant.

But the bank said: “Preliminarily, we expect a negative reaction on the stock because they are unattractive valuation (2017E 9.9x FV/EBITDA); we see a certain risk that regulatory changes will occur in Peru, which could jeopardize profitability; and this acquisition limits the possibility of increasing dividends, which would have been a better catalyst, in our opinion.” à‚ 

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