AES to Sell NewEnergy to Constellation Energy for $240 Million in Cash; Transaction Further Strengthens AES's Liquidity and Improves Financial Strength.Business Editors ARLINGTON, Va.--(BUSINESS WIRE)--June 11, 2002 The AES Corporation (NYSE NYSE See: New York Stock Exchange :AES) today announced that it has reached agreement with the Constellation Energy Group (NYSE:CEG (Continuous Edge Graphics) A VGA RAMDAC chip from Edsun Labs that adds anti-aliasing on the fly. It can also calculate intermediate shades, thus providing thousands of colors on an 8-bit board that normally generates only 256 colors. ) to sell 100 percent of its ownership interest in AES NewEnergy (www.newenergy.com), a commercial and industrial (C&I) energy services company, for $240 million in cash. The sales price approximates AES's total current investment in the business. Completion of the sale will also provide for the release of credit support currently being provided by AES to support AES NewEnergy's operations, in the form of parent guarantees and letters of credit. AES NewEnergy's United Kingdom operations are not included in the sale. The transaction is subject to regulatory approval of the Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. (FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability ), the Securities and Exchange Commission (SEC) and expiration of the waiting period under the Hart-Scott-Rodino Anti-trust Improvement Act. AES expects the sale of NewEnergy to close by year-end 2002 and result in net cash proceeds in excess of $240 million, which is subject to purchase price adjustments. J. Stuart Ryan, Executive Vice President and COO, commented, "Recent changes in wholesale electricity markets have created a situation where a national retail energy supply business no longer fits within AES's business strategy. Over the last few months, AES conducted a comprehensive and deliberate sale process, dealing with several interested parties and we are pleased with the result. The transaction is good for AES shareholders, the customers of NewEnergy and the people of NewEnergy who have brought the company to where it is today. This sale will allow NewEnergy to have access to the credit support it needs, and continue its terrific growth and profitability." Barry J. Sharp, Chief Financial Officer, commented, "This sale is another example of how AES is executing on its business plan. This transaction will significantly contribute to improving the strength and flexibility of AES's balance sheet in keeping with our commitment to improve liquidity. In addition to the cash proceeds, AES benefits through the elimination of our credit support obligations. Over the past several months, we have successfully reduced 2002 discretionary capital expenditures by approximately $500 million while preserving a substantial amount of the long-term value of our construction program, while also identifying over $200 million in annual operating cost savings. Also, with the addition of the sale of NewEnergy, we have signed agreements that represent over $1 billion of additional cash proceeds to AES. These transactions include the announced sale of Cilco, and the completion of non-recourse financings at our contract generation businesses in Puerto Rico and Northern Ireland." NewEnergy, a retail electricity company, serves commercial and industrial electricity customers in Maine, Massachusetts, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New Jersey, Pennsylvania, Ohio, Illinois, Texas, Delaware, Maryland, Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). and California. "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 Annual Report or 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 most recently ended fiscal year. Morgan Stanley & Co. Incorporated advised AES in connection with this transaction. AES is a leading global power company comprised of contract generation, distribution and competitive supply businesses in 33 countries. The company's generating assets include interests in 177 facilities totaling over 59 gigawatts of capacity. AES's electricity distribution network sells over 108,000 gigawatt gig·a·watt n. Abbr. GW One billion (109) watts. hours per year to over 16 million end-use customers. For more general information visit our web site at www.aes.com or contact investor relations at investing@aes.com. |
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