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- AES Gener S.A.
- AES Corporation
- Empresa Distribuidora de Electricidad del Este S. A.
- AES Sul Distribuidora Gaúcha de Energia S.A.
- AES Tietê S.A.
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Distribution | Generation - Hydro | Thermo/combined cycle generation | Government/Regulations | FinancingResearch Reports
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MeneameUS energy company AES (NYSE: AES) plans to complete the financial restructuring of its Brazilian and Chilean assets by the end of the year, CEO Paul Hanrahan said during a conference call to discuss third quarter results.
AES' Chilean generator AES Gener will increase capital by US$300mn to pay off debt and refinance US$400mn of remaining debt.
AES will provide a "significant part" of the US$300mn capital increase, with the balance coming from US and/or Chilean investors that would take minority stakes in the company, Hanrahan said.
The amount of AES' contribution to the capital increase will "depend on our valuation we see coming out of that investor base," CFO Barry Sharpe said.
Gener's net income improved in 3QQ3 compared to the same period last year, as did income from Brazilian generator Tiete, and Argentine generators Alicura and CTSN. The Caribbean also experienced an overall increase due to the start of commercial operations at Puerto Rico.
In Brazil, revenues from AES Eletropaulo increased in 3Q03 due to appreciation of the Brazilian real compared to 3Q02.
AES signed a memorandum of understanding with Brazil's national development bank BNDES in September for the restructuring of the US$1.2bn debt owed to BNDES by Eletropaulo.
The agreement is a debt for equity deal under which in return for writing off US$600mn debt, BNDES will own 49.9% of a new company owning AES's interests in Eletropaulo, as well as generators Uruguaiana and Tiete.
The deal puts AES "on the right footing to go forward in Brazil," Hanrahan said.
In Venezuela, subsidiary EDC increased its Q3 revenues due to higher demand and a rate increase offset by devaluation of the Venezuelan bolivar.
Meanwhile, AES will withhold further investment in the Dominican Republic until the government completes power sector reforms, Hanrahan said.
The government's announcement this week that it plans to re-privatize electric sector companies including its 50% stake in AES distribution subsidiary Ede Este is a "positive development," Hanrahan said.
However, AES' investment "remains at risk" and Ede Este is involved in legal proceedings against state power company CDEEE for freezing its accounts in a dispute over debt payments.
Lower revenue at Ede Este in the Q3 compared to the same period last year was offset by improvements at Eden, Edes and Edelap in Argentina, Sul in Brazil, and Clesa and Caess in El Salvador.
Despite the good performance of its distributors in Argentina, AES' assets in that country continue to be negatively impacted by electricity rates that are pesofied and frozen at their January 2002 level, Hanrahan said.
Overall, AES' Latin American assets contributed US$102mn of before tax income to the company's total third quarter income, compared to a US$247mn loss in the same period last year, AES said in its 3Q03 results.
However, sequentially Latin American income fell 11.3% from US$115mn in Q3, due to lower income from South America, part offset by improvements in the Caribbean.
Total Latin American revenues increased to US$1.33bn from US$1.04bn in 3Q03 and US$1.2bn in the previous quarter.
AES' net income for the nine months ended September 30, 2003 was US$41mn compared to a loss of US$743mn for the nine months ended September 30, 2002. Net income for Q3 was US$76mn compared to losses of US$315mn in 3Q02.
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