CEDAR RAPIDS, Iowa, Feb. 5, 2001 (PRNewswire) Alliant Energy Resources, Inc., a subsidiary of Alliant Energy Corp. (NYSE: LNT) and the parent company of Alliant Energy’s non-utility holdings, today announced several significant steps forward in the company’s business strategy in the fast-growing Brazilian electric energy market.
The company is announcing investments that will increase its total Brazilian customer base to 1.6 million and result in the construction of new electric generation facilities.
Alliant Energy International, Inc., a wholly owned subsidiary of Alliant Energy Resources, has acquired a stake in Sociedade Anonima de Eletrificacao da Paraiba (Saelpa) for a total investment of approximately $110 million over the next two years. Saelpa is a Brazilian electric utility serving more than 726,000 customers. Saelpa employs 1,138 people and had total annual sales of over 2,088 gigawatt hours in 2000. Alliant Energy International is a 49.9% partner in a venture with Companhia Forca E Luz Cataguazes-Leopoldina (Cataguazes), which holds 74.3 percent of Saelpa’s total equity.
Cataguazes is a group of companies, headquartered in Rio de Janiero. The Alliant Energy International and Cataguazes’ partnership was formed in January of 2000 when Alliant Energy International acquired 49.1 percent ownership in the company. Through the transaction, Alliant Energy also gained holdings in three other Brazilian utility companies CENF, Energipe and Celb.
Cataguazes has an excellent operating record, winning awards in the areas of customer service, environmental conservation and safety. Cataguazes also has a solid track record in acquiring state-run distribution companies and improving their operational performance. The Cataguazes group of companies was one of the first listed on the Rio de Janeiro Stock Exchange in 1905. As a regulated utility, Cataguazes serves more than 1.6 million (including the 726,000 served by Saelpa) customers in the states of Rio de Janeiro, Minas Gerais, Sergipe, and Paraiba providing 6,000 gigawatt hours of energy annually.
“In January 2000, we announced our plans to develop electric generation and invest in distribution in Brazil. We are successfully executing our strategy to take advantage of the business opportunities that exist there,” said John Peterson, president Alliant Energy International. “While our announcements today are significant, they simply amount to doing the things we said we would do in the way we intended to do them.”
Peterson says that increasing the scale of the Brazilian business to over 1.6 million customers and developing generation has been part of the company’s plan. “We have taken a very careful approach to investing the company’s funds in Brazil,” said Peterson. “Our first priority was to find a strong local partner. We were patient in that search and were very fortunate to find an outstanding one in Cataguazes.
“Just as our patience paid off in seeking a partner, our patience also paid off in being able to acquire customers through this transaction at a record low price of $491 per customer, or $153/gigawatt hour of sales,” said Peterson. Peterson says the costs of prior acquisitions in Brazil have averaged $1637 per customer and $301/gigawatt hour sold.
Alliant Energy also announced two new initiatives in the generation aspect of its Brazilian strategy. The company will partner with Energisa, the development subsidiary of Cataguazes and state-owned oil company-Petrobras to construct the 90-megawatt Termo Segipe cogeneration project. In a second project, Cataguazes’ generation holding company, Cat-Leo will be Alliant Energy International’s sole partner in building the 102-megawatt Juiz de Fora combined cycle plant in Minas Gerais, Brazil, under an agreement signed Thursday. “Through our strong partnership with Cataguazes, combined with the Saelpa acquisition and these new generation projects, we have positioned Alliant Energy to achieve projected returns on our Brazilian investments of over 15 percent annually,” said Peterson.
“We believe that the energy market in Brazil continues to offer a great opportunity for sales growth in an increasingly healthy economic environment,” said Peterson. “Our review indicates that energy consumption there is growing faster than electric use in U.S. homes and businesses. Working with our partners at Cataguazes provides us with an excellent opportunity to participate in this growth and add to our earnings potential.”
Alliant Energy will finance the Brazil investments by re-deploying some of its investment in McLeodU.S.A. Tom Walker, Alliant Energy’s executive vice president and CFO comments, “These latest investments in Brazil have added to the Cataguazes partnership and serve as a prime example of Alliant Energy’s strategy for converting its valuable holdings in McLeodU.S.A stock into investments that increase the company’s earning power.” Walker noted that Alliant Energy’s 41 million share stake in McLeodU.S.A represents up to $1 billion of capital that can be employed in new investments that will significantly enhance earnings. “We expect our Brazil investments to be slightly accretive to earnings in 2001 and then to add approximately thirty cents, forty cents and fifty cents per share in the years 2002, 2003 and 2004 respectively,” said Walker.
“We are committed to achieving earnings growth of 7-10 percent per year,” said Erroll B. Davis, Jr., CEO of Alliant Energy. “This will require making high return investments outside the traditional domestic utility business.” Davis expects the company’s strategies will create significant growth and build shareowner value. “We will be making major investments supported by the valuable assets at our disposal and expect to achieve our earnings growth targets,” said Davis. “We are executing on our plan to invest, connect and grow the company for a profitable future.”
Alliant Energy Corporation is a growing energy-services provider with operations both domestically and internationally. Headquartered in Madison, Wis., Alliant Energy, through its subsidiaries and partners, provides electric, natural gas, water and steam services to over three million customers worldwide. Alliant Energy Resources, Inc., the home of the company’s non-utility businesses, has operations and investments throughout the United States as well as in Australia, Brazil, China, Mexico and New Zealand. Alliant Energy International, a wholly owned subsidiary of Alliant Energy Resources, partners with local entities in Alliant Energy’s international business ventures.
For more information on Alliant Energy, see the company’s Internet site at https://alliantenergy.com