Enersis: a turbulent capital increase (A): The role of communication in financial operations
On July 25, 2012, the Superintendency of Securities and Insurance (SVS), the Chilean financial regulator, published on its website an essential fact about Enersis, the largest private electricity company in Latin America, controlled by the Italian-Spanish Endesa. The company surprised everyone by calling an Extraordinary General Meeting (EGM) to vote on a capital increase of US$8,020 million, to be held 50 days later, on September 13. This would be the largest capital increase in Chile's history, representing 13.3% of the national budget.
Prior to the announcement of the operation, there were two approaches: that of the financial department, which believed that the operation could be carried out without informing any of the stakeholders, since it was a win-win operation, all the papers were in order, and they only had to convince 6% of the minority shareholders; and that of the communications department, which knew that Endesa's entry into the country fifteen years earlier had been traumatic and had left wounds among the minority shareholders, and was in favor of creating a consensus before launching the operation.
Part A presents the dilemma, and Part B tells the story of what happened, how the operation ended, and some lessons learned.
Prior to the announcement of the operation, there were two approaches: that of the financial department, which believed that the operation could be carried out without informing any of the stakeholders, since it was a win-win operation, all the papers were in order, and they only had to convince 6% of the minority shareholders; and that of the communications department, which knew that Endesa's entry into the country fifteen years earlier had been traumatic and had left wounds among the minority shareholders, and was in favor of creating a consensus before launching the operation.
Part A presents the dilemma, and Part B tells the story of what happened, how the operation ended, and some lessons learned.
Collection: IESE (España)
Ref: DPO-864-E
Format: PDF
Number of pages: 7
Publication Date: Jun 19, 2024
Language: English, Spanish
What material is included in this case:
Description
On July 25, 2012, the Superintendency of Securities and Insurance (SVS), the Chilean financial regulator, published on its website an essential fact about Enersis, the largest private electricity company in Latin America, controlled by the Italian-Spanish Endesa. The company surprised everyone by calling an Extraordinary General Meeting (EGM) to vote on a capital increase of US$8,020 million, to be held 50 days later, on September 13. This would be the largest capital increase in Chile's history, representing 13.3% of the national budget.
Prior to the announcement of the operation, there were two approaches: that of the financial department, which believed that the operation could be carried out without informing any of the stakeholders, since it was a win-win operation, all the papers were in order, and they only had to convince 6% of the minority shareholders; and that of the communications department, which knew that Endesa's entry into the country fifteen years earlier had been traumatic and had left wounds among the minority shareholders, and was in favor of creating a consensus before launching the operation.
Part A presents the dilemma, and Part B tells the story of what happened, how the operation ended, and some lessons learned.
Read more
Prior to the announcement of the operation, there were two approaches: that of the financial department, which believed that the operation could be carried out without informing any of the stakeholders, since it was a win-win operation, all the papers were in order, and they only had to convince 6% of the minority shareholders; and that of the communications department, which knew that Endesa's entry into the country fifteen years earlier had been traumatic and had left wounds among the minority shareholders, and was in favor of creating a consensus before launching the operation.
Part A presents the dilemma, and Part B tells the story of what happened, how the operation ended, and some lessons learned.
Geographic Setting: Chile
Industry Setting: Energy and environment
Learning Objective
The dilemma of the case refers to the role of communication in a complicated financial operation and the importance of building alliances with stakeholders instead of ignoring them and acting with corporate arrogance.
It can be used in a course on corporate communication.
It can be used in a course on corporate communication.
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