Enel Green Power S.p.A. (ENELAM) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Enel Americas Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] This presentation does not constitute an offer to sell securities and is not soliciting an offer to buy any securities in any jurisdiction. The presentation should in no way be deemed an offer or an invitation to participate in the proposed merger described in this presentation. Such transaction is subject to certain corporate shareholder regulatory approvals and the corporate and securities laws and other regulations applicable in Chile, the United States of America and other relevant jurisdictions. This presentation contains statements that may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements appear throughout this presentation and include statements regarding the intents, belief or current expectations of Enel Americas and its management with respect to, among other things, Enel Americas business plans, including the proposed merger; trends affecting Enel Americas' financial conditions or results of operations, including market trends in the electricity sector in Argentina, Brazil, Colombia and Peru; the impact of competition and regulation in the electricity sector in Argentina, Brazil, Colombia and Peru; political and economic conditions in the countries in which Enel Americas and its affiliates operate; and other statements included in this presentation regarding matters that are not historical facts. Such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties. Actual results may differ materially from those provided in the forward-looking statements as a result of various risks and uncertainties, including those provided in the forward-looking statements -- or sorry, including those described in Enel Americas annual report 20 -- Form 20-F filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates they were made. Either Enel Americas nor any of its affiliates undertakes any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. For all these forward-looking statements, Enel Americas claims the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. I'd now like to hand the conference over to your speaker today, Mr. Rafael de la Haza, Head of Investor Relations. Thank you. Please go ahead.

Thank you, Jimmy. Good morning, everyone [Foreign Language], and welcome to this conference call. I'm Rafael de la Haza, Head of Investor Relations of Enel Americas, and joining me today are Maurizio Bezzeccheri; and Aurelio Bustilho, CFO and CEO of the company. The purpose of this conference call is to explain and provide more details and information about the presentation announced yesterday by our company, we think to merge Enel Green Power assets in South America and Central America, excluding Chile, into Enel Americas. At the end of the presentation, we are going to have a Q&A session. But before this, please remind that we will receive questions only through the telephone connection and not through the webcast. Now I leave the floor to Maurizio Bezzeccheri, our CEO. Maurizio, please proceed.

Thank you, Rafael. Good morning, everyone, and welcome to this conference call. As you all know, yesterday, we announced our intention to integrate all the assets that Enel Green Power has in Central and South America into Enel Americas. This operation perfectly fits into our growth strategy and paves the way for future growth. During the last year, Enel Americas has been constantly looking for growth opportunity in the region, which resulted in the integration of Enel Goias, Volta Grande and Enel Sao Paulo into our consolidation perimeter. We also have increased our stake in our distribution subsidiary in Peru. Until now, growth has been focused mainly in distribution business, leaving behind generation business. With this operation, we expect to begin a new growth phase through nonconventional renewable energy generation and in line with the energy transition strategy. On the next slide, #3, we will see the details of the proposed transaction. As you may know, the Board of Directors of Enel Americas unanimously resolved yesterday to formally initiate a merger process aimed at the acquisition by Enel Americas of the subsidiaries owned by Enel Green Power SpA, engaged in the nonconventional renewable energy business in Central and South America with the exception of Chile. This operation will be made through a merger by incorporation, in which Enel Americas would integrate into its assets a company that will own the shares that Enel Green Power currently holds in these subsidiaries, engaged in the nonconventional renewable energy business in Argentina, Brazil, Colombia, Peru, Costa Rica, Guatemala and Panama. Enel SpA would receive in exchange new shares of Enel Americas. On September 18, the Board of Director of Enel Americas asked to each controller Enel SpA about their view on the proposed integration. Enel SpA responded, stressing its interest in the transaction, provided that it should be carried out at market price and through a transaction, such a merger, which would allow Enel Americas to maintain its financial position that would support not only the future development of renewable projects but also the prospects for the company's growth. In any event, Enel SpA stated that its letter does not express a binding decision, which shall be reserved for when all the terms and condition of the transaction are defined. Before moving to the following slide, I would like to mention that Enel Americas will treat all this corporate restructuring process as a related party transaction as defined by the securities Chilean law. Let's now move to Slide #4, in which I will explain the rationale of the proposed transaction. This operation perfectly fits in our strategy considering the high priority of renewable energy in the region and development plan. We would accelerate Enel Americas positioning within energy transition scenario, while we consolidate Enel Americas as the leader power electricity in Central and South America, in the generation and distribution business, while we continue developing innovative digital products and advanced energy solutions in the region. With this merger, we could diversify our asset portfolio by geography and by generation technology, offering to our shareholder access to a cash flow derived from both conventional and nonconventional renewable electricity generation. As we would begin a new growth partner in generation business, having access to the know-how and track record of one of the leading global renewable developers as its [indiscernible] Green Power. Finally, this operation as is proposed and merger by incorporation, would allow us to preserve our financial flexibility, leaving room for future growth in Central and South America. Now I give the floor to Aurelio, who is going to show you the assets included in this operation, the generation mix of Enel Americas cost transactions and growth profile and the fitting of this transaction with our role in the energy transition scenario. Please, Aurelio. Aurelio?

Thank you, Maurizio, and good morning to everyone. As you can see on this slide, Enel Green Power Americas, has presence in 6 countries in Central and South America: Guatemala, Costa Rica, Panama, Colombia, Peru and Brazil. As Maurizio mentioned before, this transaction would be an exceptional opportunity to Enel Americas to quickly expand its geographical presence to other different countries in the region. The technologies involved in this transaction are mainly solar and wind, but it will also involve some gigawatts of hydro capacity in Central America. The total installed capacity is around 5.1 gigawatts, from which 2.9 gigawatts are already operating plants and 2.2 gigawatts are projects currently under construction. Let's now move to the Slide #6 to show you the repositioning of Enel Americas if this transaction is approved. Enel Americas currently has an installed capacity of 11.3 gigawatts, from which 39% is located in Argentina, 31% in Colombia, 18% in Peru and 12% in Brazil. About 55% of our current installed capacity is 0 emission, which in this case, corresponds to hydro capacity. In case we merged with EGP Americas, our start capacity would increase to 16.4 gigawatts, which represents an increase of 45%. Brazil would become the main contributor to the total capacity with 30%, followed by Colombia with 29%; Argentina, 37%; Peru, 14%. With this transaction, we also aim to accelerate group's decarbonization plans, leading the energy transition in the region while reducing risks or different nature -- of different nature. From this new installed capacity, around 70% would be zero emission, 15% more when compared to the current situation. Finally, we consider that this transaction would ensure an optimization of Enel Americas' balance sheet as well as the capacity to generate additional income, maximize return on investment and capturing synergy from the integration. Let's see now the growth profile in the coming -- in the next slides. We just mentioned after the merger we would have 16.4 gigawatts of total capacity in the company, considering that EGP has a large pipeline of projects in the range of 12, 13 gigawatts of new capacity in the coming -- next years. The transaction would be ensuring not only the short-term operation but also filling a very attractive future in terms of capacity growth potential. If we look at our latest strategic plan, our growth in generation business was 0 in terms of installed capacity. If this operation is done, we would increase 45% immediately and eventually around 75% more after we conclude the projects in the pipeline. Now on the next slide, Maurizio will conclude this presentation with the indicative transaction timetable for the next month.

As mentioned at the beginning of this presentation, Board of Directors of Enel Americas announced yesterday the commencement of the related party transaction described before. As required by the corporate regulations, the independent evaluators and the independent appraiser were also nominated yesterday by the Board of this company. The information on the evaluators and appraiser appointed can be obtained in the relevant fact release yesterday by the company. By mid-November, the independent evaluators and the independent appraiser will present their conclusion on the company's interest and market terms and conditions for this transaction. Once the mentioned reports are -- be available, the Board of Director of Enel America will analyze and will summon the extraordinary shareholder meeting of the company that would vote on the operation proposed. To make this merger feasible, it will be necessary to submit for the consideration of the Enel Americas' shareholders' meeting the elimination of the concentration limits established in its bylaw, pursuant to Title 12 of BL 3,500, which prevents a person from concentrating more than 65% of the voting capital of Enel Americas, among other relevant limitation. Furthermore, such a meeting should also approve the merger as a related party transaction under Title 16 of the Corporation Act. The mentioned shareholder meeting should take place by the end of December. According to this calendar, and in case this transaction is approved by the shareholder of the company, we estimate to complete it within the second quarter 2021. Rafa?

Thank you, Maurizio, Aurelio. I now pass the call to the operator for the Q&A session. Operator, please proceed.

[Operator Instructions] Our first question comes from Enrico Bartoli with MainFirst.

A few questions from my side. First of all, if you can provide any anticipation on the possible synergies that you expect to be achieved, the integration of Enel Green Power assets with your asset base. And if you can give us an indication of the additional EBITDA that those assets would contribute to Enel Americas. And second question is, in general, if you can tell us about the opportunities that the different markets where Enel Green Power has -- its asset would provide to Enel Americas in terms of further growth in terms of renewable capacity. And the third one is related to any legal constraints, if there are any, according to the Chilean law, considering Enel Americas is listed in Chile to the -- raising the limit of the 65% stake by a single shareholder in the company.

Okay. Maurizio speaking. Let's start from the last one. Legal limits, we don't see any legal limits. As I said before, we need to solve -- the shareholders need to decide the revision of bylaw. No other legal limits that I know. Opportunities for Enel Américas for each country. Of course, in the perimeter of Enel Américas, Brazil is the country with the biggest number of gigawatts in operation and also the perspective of new capacity installment, big country, good resources, good regulatory framework. Peru, they started the growth in renewable. We believe we have already considered that Enel Green Power has got, in Peru, the biggest solar and wind plant in the country. And we think that the diversification of the metrics in direction of the renewable energy can be a real opportunity. Then Argentina for us, we have no asset in operation in Argentina, and we don't see any major pipeline in terms of non-conventional renewable. Colombia is another interesting country. Right now Enel Green Power Colombia has got the biggest solar plant in operation. They won a tender on Cargo por Confiabilidad for 700 megawatts and we will analyze the -- in detail the pipeline of future projects. The combination of Central America in this deal, I think going to the possible synergy, will open commercial opportunities for Colombia as well, looking at the -- already mentioned many times in interconnection between Colombia and Central America through Panama. I think in this perspective, I think the inclusion of good assets on nonconventional energy operating in Central America, will open up further commercial synergy, especially in relation with Colombia. In general, these synergies, this commercial synergy will be a reality as well in the other countries because, at that point, you can offer a mix of conventional and nonconventional energy that will be, for sure, competitive in terms of price, considering that if you look at Brazil, something that is moving as well in Peru, the new market of free customer will be a new -- will be an interesting market that is already opened in Brazil and will be opening up, we expect, sooner as well in Peru and Colombia. So the synergies comes not only from commercial synergies, for the sales of energy. And you can see that right now, we are developing in the areas of Enel Américas, as well through Enel X, different energy solutions. So the combination of a solution coming from Enel X, the availability of a mix in which renewable will take a substantial part and the combination with the distribution assets will open up growth opportunity for Enel Américas, making in this way, Enel Américas one of even more an important player in the scenario of energy generation in Latin America, and we are able -- we will see ones that will be taken more detailed data on assets of Enel Green Power in this country. We will then quantify, of course, synergies that would be possible in this sense. Regarding EBITDA, we need just to go deep, deeper in the absence of Enel Green Power, but I will leave to Aurelio the floor if he has got some detail in this respect. Aurelio?

Thank you, Maurizio. Yes, as you explained well, we are starting from today the review of figures in more detail. Until now, we do not have exactly amount of synergies. But let's say, the biggest one is in the operation on the commercial side, as Maurizio explained. We need to calculate it. And in terms of organization, of course, we needed to calculate, together with our structure within the countries. Until now, it's a figure that we do not have yet, but in the coming days, we'll have it.

And our next question comes from Andrew McCarthy with Credicorp Capital.

I've got a couple of questions. The first one, in terms of the structuring of the transaction, just interested to understand here, it's a merger by incorporation, by which shares will get paid to Enel in [indiscernible], if you like. Did you look at the possibility of, to maybe avoid dilution of the minorities in Enel Américas? Do you also look at the possibility of doing kind of a capital increase method here or rights issue? And if so, why did you sort of prefer in the end to go via, down the merger by incorporation versus the capital increase route? And then the second question, I just wanted to understand if, I saw in the presentation sort of the structure seems to be, post-transaction that you would -- Enel Américas would directly hold the ownership in each of the countries of the nonconventional renewable businesses. Will there be a sort of step after that, when you kind of then integrate formerly those legal entities into each of the country generation businesses? Or is it too early to comment on that?

Okay. Regarding the first question, of course, the merge option comes from the reply of Enel. This is one of the -- let me say, the condition or the expectation of Enel SpA in sell -- in giving up to the development of renewable and through operation of the renewable. But from Enel Américas side, we have analyzed the different option, of course, because the sequence was, we sent a letter asking Enel if they were interested in evaluating this kind of option. And we received yesterday the reply saying that these are the conditions, merging, guarantee, the development of renewable and keeping, meanwhile Enel Américas in the opportunity to continue its growth strategy not only renewables but as well as we did in distribution. In the past, we had experience of 2 deals. One deal was in the direction that you mentioned, that was the deal of Eastern, in which Enel -- there was a capital increase opened to Enel and to the other shareholders in which Enel contribute through assets and the other shareholders contribute to money. This transaction was quite a tough transaction. Why? Of course, related to the fact that with such kind of deal, at the end of the story, you will have a lot of cash available. That is the contribution of minority shareholders and then there was in the Eastern deal, a large discussion regarding the use of proceeds of this money. And we have another deal in the region that is healthy. That means the integration of the renewable asset in Chile in energy. And this was a more relaxed transaction, less controversy in the transaction, the execution of the transaction. So for this reason, we think that, really, as management of the company, the work of Enel based as well on the previous experience makes sense. Why? Because this will maintain the possibility, not only we integrate, we will merge assets of renewable generation already in operation, allowing us, deploying the synergy we mentioned before. But as well, we will continue to build up the other projects that already are in execution or will be in execution in few times. But we will open up as well the opportunity for further pipeline that from official sources is in the range of 12, 13 gigawatts. On the other end, we will maintain at Enel Américas, with this structure of the deal, the opportunity to raise money. As you know, our net debt-to-EBITDA right now is 1.4, and we will -- we can continue to look at other opportunity like in distribution business units that can be materialized in this period. So we -- a part that is one of the explicit request of Enel to go ahead with transactions that are as well the consideration of previous deal, and finally, the fact that we -- in this way, we can continue to look at the other opportunity in distribution business. Of course, this is the view of the management. We strongly believe that this will get, as we said, the share -- the present shareholders of the company to have a larger business with larger perspective of growth. But the final decision has to be taken by the shareholder with the 2 steps we mentioned before, the -- to remove the limitation in the bylaw of concentration of more than 65% of the shares and, of course, the approval of the transaction in the terms and condition that will come out from the work that would be done by evaluators and -- evaluator. So we expect this type of consideration. So for example, we analyzed as well the option to buy the asset of Enel Green Power. First of all, to buy needs that somebody is available to sell, and this is not the case of Enel. On the other end, just to afford the acquisition of the company, you need to go through a capital increase even -- maybe even bigger than the capital increase we got in the -- in, we finalized in 2019. So we analyzed many, many options. We get -- we have got this condition from Enel. And among the hypothesis, we have analyzed and discussed with the Board we believe that this option of the merger is the way which we can be with the more value for the shareholders for the company, okay? And then the second question, I will let Aurelio to reply. Aurelio? Aurelio?

Yes. I'm here. Sorry, the microphone was...

Andrew, can you repeat the second question, please?

Yes, certainly. So I was wondering on -- in the presentation, you showed the structure of the company post transaction, and then you were showing how Enel Américas holds within each of the -- directly holds the participation, each of the nonconventional renewable businesses. Is there a kind of a standard effect where you then to break those into the existing conventional generation business in each country?

Well, I will start. Aurelio, just -- I will start and you will finalize. Andrew, for the time being that we are facing in this transaction, and we will bring to the attention of shareholders is the transaction just to integrate this company directed in Enel Américas. Of course, the possibility just to bring into the countries directly the participation in the generation business of the country, this can be an optimization but strongly will depend by fiscal evaluation. If this will resolve in a simplification, the manager, once that the operation will be finalized, we will consider this option. But we need for sure, first of all, once and if the operation will finalize of a very deep analysis from the fiscal point of view. Aurelio, sorry, if you will integrate.

That's exactly this, Andrew. As you know, now we are -- the transaction is in the Enel Américas level. And of course, we need to analyze each country. As you know, we are dealing with different tax situations and so on. Of course, if the best figure, the best final figure is to have every single organized in each country, but we need to analyze the tax impacts of each country to -- exactly to answer the first question regarding the synergies, we will have synergies but we need before to analyze the tax structure within the countries of those companies integrated with, let's say, with the conventional energy that we already have, okay?

Our next question comes from Sebastian Ramirez with Banchile.

I have a couple of questions, and I will go for the first 3 ones, and then I got another 2. The first one is that how much of the -- can you give us a sense of the level of returns that all the projects that had been executed achieved in terms of the capital invest? Do you have any idea of the level of return that the projects on the pipeline have? How -- what is the cost of debt that the EGP has? And what is the level of debt at that subsidiary have? Then additionally to that, can you give us any color of the EGP execution pipeline by year, how much of those 2.2 billion -- 2.2 gigawatts comes on 2020 and 2021? And the last one of that is that one of the things that you -- it was stated within the, a material fact was that you wanted to leave the Enel Américas corporation with enough power to pursue not only the M&A strategy that was the prior, plus the growth of EGP. If you can give us any sort of color of what would be the CapEx needed for the next 2 to 3 years in EGP in the current plan? Finally, to the EGP side. No, there's a lot. So go ahead. No worries.

No, no. Please, please, please, complete.

Okay. So -- and the last one in the list, on the EGP part, is how much of the energy contracted of EGP is to the related party?

Okay. I am sorry to say that all this question can be replied once we'll complete the due diligence on Enel Green Power. So Enel Américas, for the time being, the number we presented in this presentation coming from public sources. So we -- even the pipeline of 12, 13 gigawatts, all this kind of information comes from public sources. So we will expect the results of the due diligence of the evaluation on the asset. And we -- at the end, we can reply to this kind of questions. Regarding the execution of pipeline, et cetera, this will be part of the evaluation work that needs to be done. We know officially that Enel worldwide is able to put in operation in the range of 3,000, 4,000 megawatts per year. And an interesting part of the growth is in -- of this 3,000, 4,000 megawatt comes from Latin America. This is the track record, the official track record because, as you know, Enel Green Power, Enel released at the end of the year, the number of megawatt footing operation. On the other hand, as well from public information, we know that the capabilities of execution, on time, on budget of Enel Green Power has been one of the key strong, I say, driver for the growth and the international expansion of Enel Green Power. And this is the reason why we don't -- we are not at management, we look favorable to this transaction because we will not just buy assets. We will buy the possibility for further growth, and we expect that this further growth will continue as the past -- announced in the past years in Enel. So we expect the level of return, the level of return of the pipeline, the existing, the execution, the EGP energy to related party. This, of course, we have done transaction in Colombia, for example. Enel Green Power has sold energy through the -- to Emgesa, from the existing photovoltaic plant, El Paso, we are commercializing energy in Brazil from Enel Green Power Brazil, and we are doing the same in Peru. All these price are at market price. And I can tell you that the combination of conventional energy and renewable energy put us in the position to gain market share. This is already some that we have experienced, for example, in -- if you look at the number of free customers, we increased in Brazil. Through our commercialization company, you can realize that we get an important, interesting step ahead, thanks to the fact that we were buying energy from renewable assets. And normally, Enel Green Power sells energy through PPA, public tender or to the market. We know that the strategy in Brazil is moving in catching better opportunity, for example, for free market, in which, in free market as well, you are getting contracts, long-term contracts for between 5 and 10 years. So we are deeply analyzing these commercial synergies. And of course, we will analyze with the data coming from the due diligence and the evaluation. And we will, as Aurelio said before, quantify internally the synergy will come up.

That's perfect. If I may add a follow-up more on regards of how this transaction was originated, who proposed the transaction? The independent directors or the one related with the controller? And why now? It seems a little bit odd that once the Enel got the 65% on the threshold, this transaction was triggered. It could have been done a year ago. Why now?

One year ago, the transaction at Enel was at 52, 53, I don't know? Why 1 year ago? No, because 1 year ago, we were busy with the capital increase. I took the opportunity to run the company. In August 2018, I just recall, we were in -- with the attention of the market that was telling us that we were paying too much for São Paulo. So first of all, 2018 and 2019, being dedicated by the management of Enel Américas, just in demonstrating the good acquisition made in Enel São Paulo, and as you recall, the market was quite skeptical regarding the capability of Enel Américas, of doubling the EBITDA of the company in 1 year or just being able to integrate Goiás well as we did it. And I just recall that we spent 2018 and 2019, every 3 months, explaining to the market the results of Enel São Paulo as provided at the end of 2018. Then to -- at the end of 2018, the beginning of 2019, we were busy in the capital increase. Why the capital increase? Just at this point, without the capital increase, with the acquisition of Enel São Paulo, the possibility, capability of Enel Américas to continue to grow with 0. Why? Because we were net debt EBITDA, we are by 2.5x, was the limit that the rating agency was put into Enel Américas, avoiding -- to avoid the d rating. So we were busy in the capital increase. We finalized, as you recall, in August, September of 2019. Then we continue exploring other possibilities of growth in the traditional businesses of Enel Américas that means distribution comes some other, just to recall, some other deal opportunities, like something happening in Peru. And we realized that, of course, we do transaction only if we are able to add value to the shareholder. And we continue -- we are continuing to monitoring opportunity in distribution or analytics or by back of minority. This is there. Right now, we have a net debt to EBITDA ratio, 1.4 and less than 1.4, because we got almost EUR 500 million through the [indiscernible] in Brazil. For this reason, we were just looking -- we have a clear idea of the general scenario in which we are moving. And this is the scenario of energy transition. So electrification, you see -- you know that as Enel Américas, we are pushing the opportunities of electric mobilities in -- for example, in Colombia, we are pushing these opportunities in Brazil as well as in Peru. We are continuing to pushing digitalization of our assets. We are continuing to pursuing opportunity of distributed generation and storage. At this point, the discussion came up in the Board of Director of Enel Américas. And the question was, why we cannot grow in the generation business. My observation was that, of course, once that appear this kind of opportunity, we try to catch it. It's interesting. And just to recall and to mention to all of you the acquisition of Volta Grande, 380 megawatts of hydro generation in Brazil 1 year ago, a couple of years ago. And for this reason, let's say, the market and our consideration that the real growth of generation, not only in Latin America, worldwide, is going through renewable energy. We said, okay, there was a question mark from the market. Why not the integration of renewable energy in Latin America as the integration of renewable energy in Chile, and we said, okay, let's ask Enel if they are interested in. And this is the reason why, on behalf of the Board of Directors, I said at the end of July, Enel turned to [indiscernible]. Enel replied, as I said, yes, then say, okay, I am interested at this condition. Now up to the shareholder, decide if this deal makes sense and create value for shareholders, okay? I think that this is my -- this is the story how we spent our last 2 years. I hope that is satisfactory to you, would take the lead. Enel Américas will go after 2 months, the reply from Enel, and this is the reason why we are here, just as we did in the past, with full transparency, just disclosing the time line, the rationale and the way in which we will proceed. As we did with the capital increase, we will be fully transparent with the market, giving all detail that we have, of course, and we are aimed, by the fact that this transaction, for sure, in our opinion, will create a lot of value for Enel Américas.

Our next question comes from Javier Suarez with Mediobanca.

Three on my side. The first one is on the pipeline. On Slide #7, you are mentioning that the pipeline in hands of Enel Green Power, EUR 12 billion to EUR 13 billion. You have been elaborating on geographies. Can you elaborate on technologies? So I wanted to understand what is, in your view, the most promising technology on which Enel Américas can capitalize on this pipeline. That is the first question. The second question is that, obviously, Enel was already developing renewable energy assets in Latin America through Enel Green Power. And I can see the beauty of integrating those assets within Enel Américas. But from the point of view of Enel, which is your proposal to -- for the operation to be completed? Why do you think that to put in all assets under the umbrella of Enel Américas is going to create a virtuous circle on which maybe it is easier to accelerate on the development of those renewable synergies and the benefit that you see for the holding company or for the parent company as well? And the last -- the third and last question is on the financial structure. I think that you had mentioned during your presentation several times that Enel has put the condition that this operation preserves the financial flexibility of Enel Américas to continue with further acquisitions. So you can elaborate on that. How do you see, you need an indication on financial flexibility of Enel America post the operation? And what you are saying for further acquisition to what you are referring to? Are you referring to other continued growing under the distribution business or you're thinking about all the kind of acquisitions maybe on renewals in these as well?

Okay. I will give you the first part of the reply on the last question regarding financial flexibility, and then I will leave Aurelio to finalize in terms of number we are looking at a possible scenario. Of course, when we talk about flexibility, we have right now a mission like Enel Américas, in terms of growth in the distribution business and in the renewable business. As you know, the wind and solar opportunity happened in some defined time period. So we are strongly believing that the possibility to continue to grow in infrastructure and network or in Enel X through some acquisition will create value to the shareholder. And it's consistent with our view of energy transition. That means generation coming from renewables, entering in digitalized network with the capability to offer to the end customer energy solutions as well, thanks to the Enel X offer. Regarding the rationale, I think that the majority of the synergies will be realized in the commercial sector. Of course, I bring you an example. We had in Colombia, the opportunity to buy energies by El Paso. But in the previous phase of the -- there was always some concern regarding the possibility to buy energy from another company of the -- of Enel Group. I think once that the renewable business will come into the Enel Américas, this kind of, let's say, concerns can be removed, we can push -- pursue a more attractive interest -- business in the interest of all Enel Americas shareholders. Because right now, Enel has got its own possibility to grow -- to sell energy directly to the market of true public tender. But I think once that we will be able to put this business inside Enel America, this will be an increase of value for the Enel Américas shareholders. Regarding the pipeline, as I said before, of course, we are catching, let's say, data from public sources. But we know, because this is public as well, that the more promising technology developed by Enel Green Power in general, I have to say in the world, but in particular, in Latin America, aren't solar and wind. As you know, the price of the CapEx of solar is going down in an impressive way, taking the competition with wind. But wind still maintain an interesting perspective. And taking, say, information by my previous life, I have to say that the wind and solar resources in Latin America is among the best in the world, if you consider the cost of Peru, if you consider the northeast of Brazil or the south part of Brazil. And if you consider La Guajira in Colombia, or other region in the coast for the development of solar and Guajira for the development of wind, you have wind resources that is on the top of the world. We are looking at capacity factor that range between 3,500 equivalent hours when, for example, in Europe, you have something between 2,000, maybe 3,000 equivalent hours. So -- and consider that the regulation in Latin America, like in Brazil and now as well in Colombia, with -- for the first time, last year, we got a [Foreign Language] tender in which participate the renewable energy. And our partner in Colombia is stating that they are strongly interested in developing renewable energy. So there is the perspective, that first question, in summary, we think, mostly wind and solar, the synergies of why we believe that this incorporation of the business of renewables with existing assets and pipeline will create value for the shareholder of Enel Américas because we think that commercial operation will be easier. And of course, we will add a new cash flow coming from renewable, with a stable cash flow coming from renewable. And the flexibility, we are thinking to continue to grow as well in distribution business and enrich, a part to continue the growth in renewable, if the transaction, of course, will be approved by shareholders. And I will leave Aurelio just to elaborate regarding the parameter like net debt, EBITDA and possibility for further growth. Aurelio?

Yes. Thank you, Maurizio. Javier, We always think with this limit of 2.5x net debt-to-EBITDA, right, in order to maintain our investment rate, as Maurizio explained. And of course, with this level, we can deploy the -- and keep on growing in renewables in the region, right? This is a perfect level to keep on deploying the plan. Because as I remember -- I remind you that we are not buying assets. We are buying a business and we have with this, a strong industrial platform, end-to-end integrated with a stronger let's say, adding now the renewables. We are -- we have a much more strong position in terms of industrial and in terms of financial. So with this, we can deploy the pipeline and the portfolio that Maurizio has explained. With this, we can also participate and keep on participating in the -- especially in the privatization process in Brazil that's moving on. We are scouting every opportunity of distribution companies in Brazil. We still want to maintain, grow in strategic positions, our distribution companies. We are following the privatization process in Brazil. And with this level of balance sheet, we are able to keep on participating and, let's say, if it makes sense to, of course, maintaining the financial discipline, we will participate. And also with the minorities buyout, which is also a possibility that we are seeing for the next year since we see some advantages, especially in Brazil and in Colombia, for example. But anyway, with -- the idea here is not to abandon our strategy, it's to reinforce our strategy. And in now, this platform of renewables, what we say or why we used to say the nontradition or nonconventional but now it's much more conventional than old times. So that's the idea, to have this platform integrated, keep on advantage to keep on growing in a region, a very important region that we have a strong DNA of being part of this growing region. And that's the logical, that's the proposal of the company to all shareholders.

Our next question comes from Rodrigo Mora with Moneda.

Okay. Maurizio, Aurelio. I have 2 questions. The first one is, will the company, Enel Americas or Enel SpA provide to the financial market, financial information and physical figures to -- of Enel Green Power Latin America to the analysts to make their own analysis? And the second question, maybe it was answered before, is related to the transaction itself that the transaction is subject to eliminate the limit of concentration in Enel Americas. I would like to understand the idea of that, of -- to set this condition. Why not, for example, to set another step, for example, if the concentration limit is, as today, 65%, why don't to set a new step, for example, in 75%. This is my 2 questions, please.

Rodrigo, regarding what will be the new -- the possible rental -- new participation or shares of Enel SpA and Enel Americas, I think that we need to wait the evaluation of this asset, no. Once -- and we will know exactly what we are talking about. So for the time being, I think that makes sense to fix a presetting of value, it depends from what will come out from valuation. So it's premature. As you know, then the transaction will be proposed to the shareholders. And in this opportunity, we will know exactly what we are talking about. And then the shareholder meeting will decide. Okay. That the terms of the transaction will be presented to the shareholder meeting and the shareholder, we'll decide if accept or not, providing that, of course, has been done the previous step, that means remove the concentration of 65%. Regarding your first question, it was related, why will -- you don't -- you are thinking to this kind of deals or not. The reply is the letter of Enel. Enel is saying, gentlemen, okay. I am into -- you asked me if you are interested in doing these deals. Yes, I am interesting, providing that guarantee, the financial stability and, et cetera, and going through a merge process. For this reason, this is a request of Enel SpA. So usually in a transaction, you need to be in 2, at least, to go ahead. But as management of Enel Americas, as I told you, we have analyzed different options before receiving the reply of Enel. We got, let's say, a Board meeting in August -- at the end of August, analyzing and making a discussion of the Board. We did first board in July discussing this opportunity. And I got the green light and sent a letter to Enel that we bought another -- we worked along August just elaborating a proposal. We analyzed at least 4 different options. And I have to say that analyzing all these option, we think that really, the managing is the best option. I suppose that for you Chile, already has got experience of the Eastern deal and of the LT deal, and I suppose that you can agree that LT deal was the easiest between the 2. Why? Because not maintaining an amount of cash in the company without use of proceed. So the experience that I suppose you have already experienced in Chile with [ Erick e] and the Eastern deal, I think, is moving in favor of FTD, that is exactly a merger process. The evaluation on the growth future opportunity for Enel America moves in the direction of the merge process. And last but not least, the fact that the interest of Enel is in direction of merging the business of Enel Green Power in Enel Americas. And I think the merge process will allow Enel America, not just at assets but debt keeps because the, as you know, better than me, in the generation of renewable, the most important, the precious asset and rare asset is the capacity of developing a strong pipeline. And last but not least, the possibility of a good execution, on time, on budget of this asset. And I think Enel Green Power has demonstrated stand-alone, the capability to do that. And we are keen as management of Enel America to have the opportunity to offer to Enel Américas' shareholders this interesting opportunity of growth.

Okay. And just one last question. Could you give us what is the actual financial net debt of Enel Green Power Latin America?

Rodrigo.

Rodrigo, as I said before -- please, Aurelio. Go ahead.

Yes, we are analyzing details -- the figures, but let me tell you that is around USD 1 billion, USD 1.2 billion, right? But again, we need to look in detail these figures because this -- of course, this is the information that we got from the website, more or less. We need to analyze in detail. But just for you to have an idea, okay?

Okay. Well, my request is please, as soon as possible, release the financial information and physical figures of Enel Green Power Latin America to make our own analyze, please?

Sure, sure. Yes. You are right. We are working on that, as you may know, the -- since we published the [indiscernible], now we can deep dive in the figure and do deals and so on. As soon as possible, we'll inform the details. Of course, the valuation will be available by the middle of November, but since we can anticipate some figures, of course, and as we certainly always do, we will do it, okay?

Okay.

Rodrigo, from what we are seeing right now, I think that -- I catch that the rationale of the deal is there. You agree on the -- you see rationale in this deal. Of course, the issues is related to the value. And this is the reason why we will have 2 independent valuators. One for the Board of Directors and the other one for the Committee of Directors, and we will have somebody take the vision of the assets, no. And as soon as we will get this independent valuation, et cetera, okay, we will -- as we have done with the capital increase with the use of proceeds, we will hear the proper disclose.

Our next question comes from Charles Fishman with Morningstar.

So you'll have 2 independent evaluators, one for the Board, one for the independent director -- or the committee of independent directors. Can you maybe give us a little more color about how the selection of that company or the evaluator will be done? As you may recall, and I appreciate this is a -- you weren't part of the Enel Américas management at that time. But the predecessor of Enel Americas is going through a similar process. Roughly 8, 9 years ago, the evaluator is -- if my memory is correct, was like a university professor, and it was flawed. And certainly, that's a concern this time around that a better job will be done on the evaluation. So if you could just give us a little idea of how that selection of that evaluator will be made by the independent committee, number one. And then my second question is related to that, will the -- I believe you have a board member now that represents the Chilean pension funds. Will that person be a member of this independent committee?