Sempra closes 45% LNG stake sale to KKR, collecting $4.56 billion of $9.99 billion
Sempra closed the 45% sale of its LNG arm to KKR and Canada's pension fund with $4.56 billion of the $9.99 billion price in cash; the other $5.34 billion arrives as interest-bearing IOUs running to 2034, issued by a utility carrying $37.5 billion of its own debt.
Vincent Jiangthree-minute read
Sempra+0.23% — Sempra, up 0.23 percent today closed the sale of 45% of Sempra Infrastructure Partners, its LNG export arm and home of the Port Arthur terminal in Texas, to affiliates of KKR with Canada Pension Plan Investment Board as indirect co-investor on Nov 1. 12, and collected $4.56 billion in cash at closing, subject to post-closing adjustments 1. The base price was set at $9.99 billion when the deal was struck in September 2025 3.
After the close, the KKR+0.87% — KKR, up 0.87 percent today group owns 65% of the business, Sempra keeps 25%, and the Abu Dhabi Investment Authority keeps 10%; Sempra deconsolidated the unit the same day 1. Justin Bird takes over as chief financial officer on Nov. 13, with Karen Sedgwick moving to run Southern California Gas 1.
Sempra keeps a quarter of the LNG arm it just sold control of
The KKR group holds 65%; Sempra holds 25% and no longer consolidates the unit
- KKR group65%65%
- Sempra25%25%
- Abu Dhabi Investment Authority10%10%
Data
| Slice | Value | Share |
|---|---|---|
| KKR group | 65% | 65% |
| Sempra | 25% | 25% |
| Abu Dhabi Investment Authority | 10% | 10% |
The buyers owe the seller $6.82 billion
The rest of the price is Sempra's own credit extended to its buyers: $4.14 billion plus 7.5% interest compounded quarterly, due Dec 1. 31, 2027, totaling $4.51 billion, backed by equity commitment letters from investors in the KKR group; and $1.20 billion of promissory notes paying 8.5% and then 10%, maturing Feb 1. 11, 2034, worth $2.31 billion with interest if held to maturity 1. Counted with interest, Sempra stands to collect about $11.4 billion 3. Sempra expects a pre-tax gain of $2.80 billion to $3.30 billion, preliminary by its own telling 1.
Of the $11.4B Sempra expects to collect, $4.56B came as cash at close
Less than half the money arrives as cash; $6.82B, with interest, comes later
Data
| Part | Proceeds, with contractual interest | Share |
|---|---|---|
| Cash at close, Nov. 12, 2026 | $4.56B | 40.1% |
| Installment due Dec. 31, 2027 | $4.51B | 39.6% |
| Notes due Feb. 11, 2034 | $2.31B | 20.3% |
Sempra is lending to its buyers while its own debt climbs
The complication is the direction of the loan. A company selling a growth asset to strengthen its balance sheet just became its former unit's creditor.
Sempra's total debt stood at $37.5 billion at Sept 59. 30, 73.2% of its market value, and free cash flow ran minus $4.87 billion over the trailing twelve months 5; total debt has climbed from $31.1 billion at the end of 2023 to $37.5 billion 9.
The cash is earmarked for Texas: management said on its Nov. 5 call that Oncor's 2027-2031 plan will run about 20% larger than the current $47.5 billion, with the Texas system hitting a record 33 gigawatt peak 5 (our Nov. 1 report on that call) 5.
Total debt is $6.4B higher than at the end of 2023
Debt fell in only one of the twelve quarters charted
Data
| Total debt | |
|---|---|
| Q4 '23 | $31.08B |
| Q1 '24 | $31.77B |
| Q2 '24 | $32.87B |
| Q3 '24 | $34.36B |
| Q4 '24 | $35.85B |
| Q1 '25 | $37.73B |
| Q2 '25 | $38.59B |
| Q3 '25 | $32.69B |
| Q4 '25 | $35.02B |
| Q1 '26 | $36.43B |
| Q2 '26 | $36.66B |
| Q3 '26 | $37.47B |
The buyer's paper holds; Texas regulators are the risk
The buyer's side holds up on paper. SI Partners carries contracted LNG assets, and investors in the KKR group have committed to fund the 2027 payment 1. CEO Jeffrey Martin calls the deal a step toward simplifying Sempra around its Texas and California utilities 2. The counterweights: Morningstar has flagged doubts about Oncor's growth runway after Texas political shifts 6, and California regulators' proposed denial of a 2024 rate correction could push 2027 results to the lower half of the $5.10 to $5.70 guidance 5.
The market has not paid for the trade
As for price: one syndicated alert reporting a 52-week low of $18.36 carries the ticker SREA, Sempra's 5.75% junior subordinated notes 8, while the common stock closed Nov. 12 at $78.98 7 and sits near its 52-week low of $76.21, at about 16.7 times earnings against 21.9 for the median S&P 500 company 5.
Watch two dates: Dec. 31, 2027, when the first $4.51 billion installment comes due, and February 2027, when the size of the bigger Oncor plan lands 5. A utility that cannot fund its own buildout just extended $5.34 billion of credit to two of the largest pools of money on earth 5.
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