AES Announces Result of Final Remarketing of Series A Cumulative Perpetual Convertible Preferred Stock Relating to 2021 Equity Units Offering and Settlement Rate for Purchase Contract Component of 2021 Equity Units Offering

Rhea-AI Summary

AES Corporation announces unsuccessful final remarketing of its Convertible Preferred Stock with a liquidation preference of $1,000 per share. Holders of the stock will automatically deliver it to satisfy payment obligations for AES common stock.

Positive

• None.

Negative

• The unsuccessful remarketing of the Convertible Preferred Stock may indicate investor reluctance or market conditions affecting the company's financial position.

Financial Analyst

The announcement by AES Corporation regarding the unsuccessful remarketing of its Convertible Preferred Stock and the details on the settlement rate for the purchase contracts of its Corporate Units is a critical piece of information for investors and analysts. The inability to remarket these securities could indicate a lack of investor confidence or a potential overvaluation of the preferred shares. This development can lead to increased volatility in the company's stock price as the market absorbs the implications of this liquidity event.

Furthermore, the determined Settlement Rate provides existing and potential investors with a clearer understanding of the conversion mechanism and its potential dilutive effect on the common stock. This is particularly important as the issuance of additional common shares can lead to a decrease in earnings per share (EPS), a key metric for valuing a company's stock. Investors should closely monitor the company's stock performance following this announcement, as it may affect the stock's supply and demand dynamics.

Market Research Analyst

The unsuccessful remarketing of AES Corporation's Convertible Preferred Stock may signal broader market trends or sector-specific challenges. It is essential to consider the energy sector's current climate, including regulatory changes, shifts in energy prices and competitive pressures, which could have influenced investor appetite for such securities. The conversion rate set forth also provides insight into the company's valuation method, which could be benchmarked against industry standards for similar financial instruments.

Analyzing the company's strategic response to this unsuccessful remarketing effort could shed light on management's adaptability and financial strategy. This event might prompt the company to explore alternative financing options or to adjust its capital structure, which could have long-term implications for its financial health and operational flexibility.

Legal Expert

The legal implications of the automatic conversion of the Convertible Preferred Stock to satisfy the purchase price for AES common stock are significant. This automatic conversion mechanism is a contractual obligation embedded within the terms of the 2021 Equity Units. It is crucial for stakeholders to understand the legal framework governing these financial instruments, including any rights or obligations that may be triggered upon such events.

Investors should be aware of the contractual terms that dictate the conversion and settlement processes, as these terms directly impact the timing and manner in which they might receive common stock or cash in lieu of fractional shares. Clarity on these terms can prevent disputes and ensure that the conversion process adheres to both company policy and securities regulations.

ARLINGTON, Va., Feb. 14, 2024 /PRNewswire/ -- The AES Corporation (NYSE: AES) ("AES" or the "Company") announced today the unsuccessful final remarketing of its 0% Series A Cumulative Perpetual Convertible Preferred Stock, no par value, with a liquidation preference of $1,000 per share (the "Convertible Preferred Stock"), originally issued on March 11, 2021 as part of the Company's equity units (the "2021 Equity Units") and the settlement rate of the purchase contracts that form part of its corporate units (the "Corporate Units").

Each holder of a Corporate Unit will receive 3.8859 shares (the "Settlement Rate") of AES common stock with cash to be paid in lieu of any fractional share. The Settlement Rate was determined based upon the daily volume weighted average of AES' common stock over a consecutive 20-day trading period ending on February 13, 2024.

As of February 15, 2024, holders of the Convertible Preferred Stock that is a component of the 2021 Equity Units will be deemed to have delivered, automatically and without requiring any additional action on their part, their Convertible Preferred Stock to AES to satisfy in full their obligations to pay the purchase price for the AES common stock to be delivered upon settlement of the purchase contract component of their 2021 Equity Units.

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, rates of return consistent with prior experience and the COVID-19 pandemic.

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' 2022 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 2022 Annual Report on Form 10-K filed March 1, 2023 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 Relations: Susan Harcourt 703-682-1204, susan.harcourt@aes.com
Media Contact: Amy Ackerman 703-682-6399, amy.ackerman@aes.com

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SOURCE The AES Corporation

What is the liquidation preference of AES's Convertible Preferred Stock?

The liquidation preference of AES's Convertible Preferred Stock is $1,000 per share.

How was the Settlement Rate for the Corporate Units determined?

The Settlement Rate was determined based on the daily volume weighted average of AES's common stock over a 20-day trading period.

What action do holders of Convertible Preferred Stock need to take after the unsuccessful remarketing?

Holders will automatically deliver their Convertible Preferred Stock to satisfy payment obligations for AES common stock.

When will holders of the Convertible Preferred Stock be deemed to have delivered it to AES?

As of February 15, 2024, holders will be deemed to have delivered the stock to AES.

What was the outcome of the final remarketing of the Convertible Preferred Stock?

The final remarketing was unsuccessful.

What was the settlement rate for the purchase contracts of the Corporate Units?

Each holder of a Corporate Unit will receive 3.8859 shares of AES common stock with cash for any fractional share.