AES Announces Completion of Chilean Subsidiary Debt Recapitalization.Energy Editors/Business Editors ARLINGTON, Va.--(BUSINESS WIRE)--April 1, 2004 The AES Corporation AES Corporation AES (NYSE) is a Fortune 1000 company that generates and distributes electrical power. It was founded on January 28, 1981 by Roger Sant from the US Federal Energy Administration and Dennis Bakke from the Office of Management and Budget. (NYSE NYSE See: New York Stock Exchange :AES) today announced completion of the debt recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. of its Chilean subsidiary, AES Gener S.A. ("Gener"). The recapitalization has significantly extended debt maturities and reduced Gener debt by $250 million, while providing continued strong cash flow. It also positions Gener to fully participate in the promising Chilean electricity sector. AES also has elected to complete Gener's equity recapitalization without a planned secondary offering by its subsidiary of 1,092 million Gener shares. AES will retain its current 99% Gener ownership, and will contribute its pro-rata share of a $100 million Gener capital increase in May. AES also noted it will receive a dividend of approximately the same amount in May as well. Upon completion of the Gener equity recapitalization AES will have made a net investment of $300 million. AES will consider a secondary offering of Gener shares at a future date. The primary consideration in terminating the offering was Argentina's recently proposed limits on exports of natural gas to northern Chile. This has resulted in uncertain local equity market conditions for Chilean power producers. AES does not believe these limits will have a material adverse affect on Gener or on AES. "Gener has attractive long-term prospects, and we're prepared to retain our current ownership position," said Paul Hanrahan, President and Chief Executive Officer. "We do expect to move ahead with a secondary offering at some future date." Commented Executive Vice President Joseph Brandt, "The recapitalization of Gener, led by the recent successful note offering, has revitalized the financial strength of the company. Gener expects to play a leading role in the Chilean electricity sector going forward." AES also reaffirmed its prior 2004 earnings and cash flow guidance, excluding non-recurring Gener transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). . At the time AES provided its 2004 earnings and cash flow guidance, it indicated the Gener recapitalization plan could result in certain non-recurring costs. As previously disclosed, AES will record a non-recurring pre-tax loss of $21 million in the first quarter associated with a series of treasury lock agreements that were part of the senior notes offering. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 Statements in this press release regarding AES Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ending December 31, 2003. About AES AES is a leading global power company, with 2003 sales of $8.4 billion. AES delivers 45,000 megawatts of electricity to customers in 27 countries through 114 power facilities and 17 distribution companies. Our 30,000 people are committed to operational excellence and meeting the world's growing power Growing Power is an urban agriculture organization headquartered in Milwaukee, Wisconsin. It runs the last functional farm within the Milwaukee city limits and also organizes activities in Chicago. needs. To learn more about AES, please visit www.aes.com or contact AES investor relations Investor relations The process by which the corporation communicates with its investors. at investing@aes.com. |
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