Tuesday, June 17, 2008

Teachers' Pension Plan, partner buy Chilean electricity system

The Ontario Teachers' Pension Plan and a U.S. infrastructure fund are splitting the $870 million US cost to buy a large Chilean electricity distribution system, the SAESA Group.

Teachers' and Morgan Stanley Infrastructure will each own half of SAESA, which serves 16 per cent of Chile's population (about 2.6 million people), the buyers said in a news release Tuesday.

The buyers will also assume more than $400 million in existing SAESA debt.

Public Service Enterprise Group Inc. of New Jersey is the seller.

Teachers' and other pension funds have been investing in infrastructure because the businesses tend to be stable and produce steady returns over long periods, which match the funds' liabilities — regular payouts to pensioners over long periods.

"SAESA is a 90 per cent regulated business that generates predictable cash flows and steady returns over the long term, which is well suited to our investment objectives," said Ron Lepin, chief operating officer of Morgan Stanley Infrastructure.

SAESA also has generating capacity and secondary transmission lines.

The deal is expected to close in the third quarter, the buyers said.

Late last year, Teachers’ bought about 70 per cent of Chilean water services operator Esval S.A. for $570 million.

In 2007, it also bought nearly half of the airport in Birmingham, England, with an Australian partner for $875 million Cdn, the New York Container Terminal on Staten Island, N.Y., for $2.4 billion US and other terminals in Bayonne, N.J., and in Vancouver and Delta, B.C.

Teachers’ said the fund totalled $108.5 billion Cdn at the end of 2007. It invests and manages the fund for 278,000 active and retired teachers.



  • Rangel tries to tax hedge pay - again
  • Fix ‘ailing’ pension system, Lamoureux urges
  • Railpower building new Quebec plant
  • 0 comments: