CIC to take 15-per cent stake for $1.58 billion in US power producer AES
07 Nov 2009
US-based global power producer and distributor AES Corporation, which supplies power to 29 countries, said yesterday that it will sell $1.58 billion in stock to a subsidiary of China's sovereign-wealth fund China Investment Corporation (CIC), for a 15 per cent stake in the company to raise funds for expansion.
Virginia-based AES signed a stock purchase agreement with a wholly owned investment subsidiary of CIC to raise $1.58 billion of new equity, where CIC will acquire 125.5 million shares of AES stock for $12.60 per share for an approximate 15 per cent stake in the company.
AES, a Fortune 500 Company also announced the signing of a letter of intent with CIC to raise an additional $571 million of equity for an approximate 35 per cent interest in its wind generation business.
It will also give the $200 billion sovereign-wealth fund a board seat in the company, which currently has 10 members.
AES owns and operates a diverse portfolio of power generation and distribution businesses in 29 countries. More than two-thirds of AES' revenue is generated outside of the United States. AES seeks to invest in high-growth areas of the power sector, including renewable energy and emerging markets.
With 2008 revenues of $16 billion, AES owns and manages $35 billion in total assets and gets more than 80 per cent of its revenue from outside the US. BusinessWeek had named AES to its 2009 ''BW 50 Best Performers'' list.
AES has 1,300 MW of wind-power projects under development and has applied for stimulus money to fund a renewable- energy-storage project.
Paul Hanrahan, president and CEO of AES, stated, ''We see tremendous potential for growth in meeting demand for affordable and sustainable power throughout the world. Having CIC as a partner will enhance our financial flexibility, provide capital needed to move more quickly on our project development pipeline, and offer broader access to high quality investment opportunities.''
