AES Agrees to Sell its Equity Interest in AES Brasil for Approximately $640 Million

Rhea-AI Summary

The AES (NYSE: AES) has agreed to sell its 47.3% equity interest in AES Brasil to Auren Energia for approximately $640 million. This sale is part of a merger between AES Brasil and Auren Energia, valuing AES Brasil shares at about 11.55 Brazilian Real per share before adjustments. The deal is expected to close in 4 to 6 months, pending customary approvals and a late-stage construction project completion.

Proceeds from the sale will support AES' growth in renewables and U.S. utilities. This transaction aligns with AES' strategy to simplify its portfolio and strengthen its balance sheet. AES aims to reinvest in supplying renewable energy to corporate customers in the U.S. and expanding its utilities. With this sale, AES has achieved over half of its $3.5 billion asset sale proceeds target set for 2027.

Positive

• AES will receive approximately $640 million from the sale of its 47.3% equity interest in AES Brasil.
• The transaction aligns with AES' strategy to simplify its portfolio and strengthen its balance sheet.
• Proceeds will support AES' growth in renewables and U.S. utilities.
• AES has achieved over half of its $3.5 billion asset sale proceeds target for 2027.
• The sale includes a diverse renewable energy portfolio: 51% hydroelectric, 43% wind, and 6% solar.

Negative

• The transaction's completion is contingent on customary approvals and a late-stage construction project.
• Potential risks include delays in closing and unforeseen challenges in the construction project.
• The sale price of approximately 11.55 Brazilian Real per share may be subject to purchase price adjustments.

News Market Reaction

+0.38%

1 alert

+0.38% News Effect

On the day this news was published, AES gained 0.38%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Proceeds to be Used to Fund AES' Robust Growth in Renewables & US Utilities

ARLINGTON, Va., May 15, 2024 /PRNewswire/ -- The AES Corporation (NYSE: AES) announced today that it has agreed to sell its 47.3% equity interest in AES Brasil to Auren Energia for approximately $640 million in proceeds to AES.  This sale will be completed in conjunction with a merger between AES Brasil and Auren Energia, with AES Brasil shares valued at approximately 11.55 Brazilian Real per share, before purchase price adjustments.

"We are very proud of the work our people have done in Brazil for more than 25 years.  They significantly improved operations at our hydroelectric facilities, created new commercial products, and built a portfolio of more than 3 GW of new wind and solar assets.  As one of Brazil's leading renewable companies, with a similar footprint, we see Auren as the right owner of these assets to achieve greater economies of scale and continue to serve the Brazilian market with clean and reliable energy," said Andrés Gluski, AES President and Chief Executive Officer.  "With this transaction, AES is continuing to simplify its portfolio, while meeting its strong balance sheet objectives.  We are now focusing the vast majority of our investments into supplying renewable energy to corporate customers in the US and our rapidly growing utilities."

Including this sale, as well as others closed in 2023 and 2024, AES will have achieved more than half of its $3.5 billion asset sale proceeds target through 2027.

Today's announcement is an agreement to sell AES' 47.3% interest in AES Brasil's 5.2 GW portfolio of renewable energy that is 51% hydroelectric, 43% wind and 6% solar.  The transaction is expected to close in 4 to 6 months and is subject to customary closing approvals, and a condition precedent related to completion of a late stage construction project.    

About AES

The AES Corporation (NYSE: AES) is a Fortune 500 global energy company accelerating the future of energy.  Together with our many stakeholders, we're improving lives by delivering the greener, smarter energy solutions the world needs.  Our diverse workforce is committed to continuous innovation and operational excellence, while partnering with our customers on their strategic energy transitions and continuing to meet their energy needs today.  For more information, visit www.aes.com.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, our expectations regarding accurate projections of future interest rates, commodity price and foreign currency pricing, continued normal levels of operating performance and electricity volume at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as the execution of PPAs, conversion of our backlog and growth investments at normalized investment levels, and rates of return consistent with prior experience.

Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES' filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risks discussed under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES' 2023 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except where required by law.

Any Stockholder who desires a copy of the Company's 2023 Annual Report on Form 10-K filed February 26, 2024 with the SEC may obtain a copy (excluding the exhibits thereto) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made. A copy of the Annual Report on Form 10-K may be obtained by visiting the Company's website at www.aes.com.

Website Disclosure

AES uses its website, including its quarterly updates, as channels of distribution of Company information.  The information AES posts through these channels may be deemed material.  Accordingly, investors should monitor our website, in addition to following AES' press releases, quarterly SEC filings and public conference calls and webcasts.  In addition, you may automatically receive e-mail alerts and other information about AES when you enroll your e-mail address by visiting the "Subscribe to Alerts" page of AES' Investors website.  The contents of AES' website, including its quarterly updates, are not, however, incorporated by reference into this release.

Investor Contact: Susan Harcourt 703-682-1204, susan.harcourt@aes.com
Media Contact: Amy Ackerman 703-682-6399, amy.ackerman@aes.com 

View original content to download multimedia:https://www.prnewswire.com/news-releases/aes-agrees-to-sell-its-equity-interest-in-aes-brasil-for-approximately-640-million-302146975.html

SOURCE The AES Corporation

FAQ

What is the value of the AES Brasil sale?

AES will receive approximately $640 million from the sale of its 47.3% equity interest in AES Brasil.

What is the AES Brasil share valuation in the transaction?

AES Brasil shares are valued at approximately 11.55 Brazilian Real per share before purchase price adjustments.

When is the AES Brasil sale expected to close?

The transaction is expected to close in 4 to 6 months, pending customary approvals and a late-stage construction project completion.

What will AES do with the proceeds from the sale?

The proceeds will be used to fund AES' growth in renewables and U.S. utilities.

What is the composition of AES Brasil's renewable energy portfolio?

AES Brasil's renewable energy portfolio consists of 51% hydroelectric, 43% wind, and 6% solar.

How does this sale align with AES' business strategy?

The sale aligns with AES' strategy to simplify its portfolio and achieve strong balance sheet objectives.

How much of its asset sale proceeds target has AES achieved?

Including this sale, AES has achieved more than half of its $3.5 billion asset sale proceeds target through 2027.