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Oct 14 (Reuters) - U.S. power company Sempra Energy said on Monday it would sell is Chilean businesses to China’s State Grid International Development Ltd for $2.23 billion in cash as part of its plan to exit South America and shore up capital.
Sempra, much like other utilities companies, has been seeking to bolster its finances and increase its appeal to investors after wildfires in California exposed it to more legal liabilities.
The company was under pressure from hedge fund Elliott Management Corp and investment firm Bluescape Group to scale back its global operations.
Reuters reported on Friday that the companies were close to an agreement.
The company said it will use the proceeds to support its growing capital needs of utilities in California and Texas.
The deal includes Sempra’s 100% stake in Chile’s third-largest distributor of electricity Chilquinta Energía S.A., Tecnored S.A. and a 50% interest in Eletrans S.A.
The deal follows Sempra’s sale of its Peruvian business to China Yangtze Power International (Hongkong) Co for $3.59 billion last month as it focuses on its core U.S. and Mexican operations.
“This agreement... moves our company one step closer to completing the sale of our South American businesses and concentrating our investment strategy right here in North America,” Sempra’s Chief Executive Officer Jeffrey Martin said. (Reporting by Arundhati Sarkar in Bengaluru Editing by Saumyadeb Chakrabarty and Aditya Soni)