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Endesa Chile shows "healthy" financial structure

Bnamericas
Although Chilean generator Endesa Chile's net income for the first nine months of 2003 did not increase much from the same period last year, the company's financial structure is "much healthier" now than it was in September 2002, Fitch analyst Carlos Diez told BNamericas. Endesa (NYSE: EOC) reduced its short-term debt from US$1.6bn in September 2002 to US$630mn in September 2003, which as a percentage of total debt fell to 14.1% from 28.3%, the company said in a filing to securities regulator SVS. Long-term debt also fell slightly. "The important thing here, even more than the cash flow, which is a bit less [in Chile] due to the sale of some assets, is that the financial structure is much better," Diez said. Endesa refinanced US$700mn in short-term debt with four banks in March this year as part of parent company Enersis's US$2.3bn refinancing plan, which put the due date back to 2008. "The restructuring was very positive for the company and this is reflected in the results," Diez said. "The company has increased the proportion of long-term debt versus short-term debt," he said, adding, "This is better because the debt is more consistent with [Endesa's] cash flow, which is focused more on the long-term." Endesa posted net income of 67.4bn pesos (US$107.3mn) for the January-September period, up slightly from 66.8bn pesos in the same period last year. Endesa's parent, power holding company Enersis, is not planning major new investments in Latin America in the next few years, but has reduced debt and improved financial liquidity through refinancing US$2.3bn in debts, raising US$2bn from a capital increase and divesting assets. Endesa Spain owns Enersis.

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