ARLINGTON, Va., Dec. 11, 2000 (BUSINESS WIRE)The AES Corporation (NYSE:AES) and EDF International S.A. (EDF) announced today they have entered into an agreement to acquire a 9.2% interest in Light Servicos de Eletricidade S.A. (Light) from a subsidiary of Companhia Siderurgica Nacional (CSN) for $362 million.
Under the agreement, an EDF subsidiary will purchase 70% of the shares to be sold while AES will purchase the remaining 30%. Closing of the transaction is subject to the receipt of certain consents and approvals from Brazilian regulatory authorities as well as other customary conditions. The sale is expected to close before the end of the first quarter of 2001.
Today’s announcement follows the acquisition on December 4, 2000 by AES and EDF of the shares of Light owned by Reliant Energy Inc. for approximately $430 million.
Light is an electric generation and distribution company, serving 2.9 million customers in and around Rio de Janeiro, Brazil. AES and its partners (CSN, EDF and Reliant Energy) acquired a controlling interest in Light in 1996. Light in turn owns a controlling interest in Eletropaulo S.A., an electric distribution company serving 4.6 million customers in greater Sao Paulo, Brazil.
Following the purchase of the Light shares previously owned by CSN and Reliant Energy, AES and EDF will together be the controlling shareholders of Light and its subsidiary Eletropaulo.
AES and EDF have agreed in principle that AES will then take operational control of Eletropaulo and the telecom businesses of Light and Eletropaulo, while EDF will take operational control of Light and Eletropaulo’s electric workshop business.
AES and EDF intend to continue to pursue a further rationalization of their ownership stakes in Light and Eletropaulo, as a result of which AES would become the sole controlling shareholder of Eletropaulo and EDF would become the sole controlling shareholder of Light.
The structure and process by which this rationalization may be effected, and the resulting timing, have yet to be determined and will likely be subject to approval by various Brazilian regulatory authorities and other third parties. As a result, there can be no assurance that this rationalization will take place.
Mr. Luiz David Travesso, Vice President of AES, said, “It has been a long but rewarding process to gain operational control of Eletropaulo. This achievement allows us to reorganize the company in a manner consistent with our values, and to provide better and additional services to Eletropaulo’s customers. This is a strong company, and the talented people of Eletropaulo will make a difference in the Brazilian energy industry.”
Mr. Thomas A. Tribone, Executive Vice President of AES, stated, “In addition to rationalizing control of our energy assets in Brazil, this transaction will allow us to operate the telecommunication businesses of Light and Eletropaulo together with our nationwide fiber-optic backbone that is being developed by Eletronet. This will create a Brazilian telecom business that is unique in the breadth of its market coverage and access to customers. We have the opportunity to create significant value for our customers and for the shareholders of AES, Light and Eletropaulo.”
Mr. Dennis W. Bakke, President and Chief Executive Officer of AES, commented, “We are delighted to have been associated with CSN and to have reached this milestone. We also very much appreciate our strong and long-standing relationship with EDF. This transaction puts all of our companies in a better position to serve our respective customers.”
AES is a global power company comprised of competitive generation, distribution and retail supply businesses in Argentina, Australia, Bangladesh, Brazil, Canada, China, Colombia, Dominican Republic, El Salvador, Georgia, Hungary, India, Kazakhstan, the Netherlands, Mexico, Pakistan, Panama, Sri Lanka, the United Kingdom, the United States and Venezuela.