AES agrees to sell Cilcorp to Ameren for $1.4bn

April 29, 2002 – AES Corporation today announced an agreement with the Ameren Corporation to sell its ownership interest in Cilcorp, a utility holding company whose largest subsidiary is Central Illinois Light Company (Cilco), in a transaction valued at $1.4bn.

The transaction also includes an agreement to sell AES Medina Valley Cogen, a 40 MW gas-fired cogeneration facility located in Cilco’s service territory.

Ameron will assume $860m of debt and preferred stock and the transaction value equates to an equity purchase price in excess of $500m (subject to certain closing adjustments) which approximates the book value of AES’ investment in Cilcorp and Medina Valley.

AES acquired Cilcorp in October 1999 in a transaction valued at $1.3bn billion including the assumption of $412m of debt and preferred stock and the payment of $885m in cash to Cilcorp public shareholders. AES financed its acquisition of Cilcorp with $469m of equity and the balance with acquisition debt.

The agreement includes all of Cilco’s electric and gas utility assets and the cogeneration assets of Medina Valley. The sale of Cilcorp by AES was required under the Public Utility Holding Company Act (PUHCA) when AES purchased IPALCO, a regulated electric utility based in Indianapolis, Indiana, in March 2001.

The transaction is subject to regulatory approvals by the Illinois Commerce Commission (ICC), the Federal Energy Regulatory Commission (FERC), 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 Cilcorp to close in the first quarter of 2003 and to receive cash proceeds in excess of $500m.

Cilco, an integrated electric and gas utility based in Peoria, Illinois, serves more than 200 000 electric and gas customers in central Illinois. Ameren, an integrated electric and gas utility with more than $10bn in assets, provides electric and gas service in Illinois and Missouri. With the acquisition of Cilcorp, Ameren will rank as Illinois’ second largest electric utility.

Dennis W. Bakke, AES President and Chief Executive Officer, commented, “AES conducted a comprehensive and deliberate sale process, dealing with multiple interested parties. The outcome is a sale agreement that we believe meets the needs of both AES shareholders and the Cilco community.”

“This sale will significantly contribute to the long-term strength of AES’ balance sheet in keeping with our commitment to improve liquidity. The sale price is in line with our expectations. Ameren’s strong financial position and high ranking for quality service give us confidence that the proposed transaction will obtain all required regulatory approvals.”

“We listened closely to the concerns of local stakeholders during the sales process. In Ameren, we have selected a company with the resources and demonstrated commitment to continue Cilco’s tradition of high quality service and community support.”

Lehman Brothers acted as financial advisor to AES in the transaction.

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