AEI Sells Operating Companies for $4.8 Billion

AEI Sells Operating Companies for $4.8 Billion
HOUSTON, January 19, 2011 – AEI announced today that it has embarked upon a major
restructuring and repositioning of the company. “After AEI withdrew its initial public offering
in October 2009, the company and its shareholders began evaluating strategic alternatives for the
business,” said Jim Hughes, CEO of AEI. “This was a clean sheet exercise that evaluated all
available alternatives. We concluded that AEI should sell the vast majority of its regulated
assets, return the capital to our shareholders, and plan to reorganize the company around a
smaller business focused on power generation.”
Accordingly, AEI is pleased to announce it has agreed to sell its interests in 10 operating
companies to nine separate parties for USD $4.8 billion, representing 80% of AEI’s total assets.
The initial funds received will be used to repay financial debt and PIK notes. The remaining
cash is expected to be distributed following closing of the transactions, providing for the funding
of equity capital needs of various greenfield generation projects, and after deducting taxes,
transaction, and transition costs. AEI is planning to reorganize the company around its core
power generation assets, subject to final shareholder approval. The resulting company will be a
robust business with significant opportunities for creation of additional shareholder value.
The transactions are expected to close in the coming months following required regulatory and
third party consents. The transactions include:
1. Sale of 99.68% of Elektro in Brazil to Iberdrola;
2. Sale of 52.13% of Promigas in Colombia to Corporacion Financiera Colombiana
S.A.(”Corficolombiana”), Fondo de Capital Privado Corredores Capital I, Fondo
de Capital Privado por Compartimenos CP-Val, and Empresa de Energia de
Bogota S.A. E.S.P. (“EEB”);
3. Sale of 60% of Calidda in Peru to EEB;
4. Sale of 50% of Chilquinta in Chile and 37.97% of Luz del Sur in Peru to Sempra
Pipelines & Storage;
5. Sale of 51% of ENSA in Panama and 86.41% of DelSur in El Salvador to
Empresas Públicas de Medellin E.S.P. (“EPM”);
6. Sale of 90% of EDEN, 77.1% of EMDERSA, and certain other assets, all in
Argentina, to Pampa Energia S.A.; and,
7. Sale of 100% of ENS in Poland to Kulczyk Group.
“With these transactions and the value retained in the continuing business, the shareholders
stand to realize total value for the company which is a significant increase over the proposed
offering price for the unsuccessful initial public offering a year ago,” said Hughes.2
The company expects to reorganize around its remaining assets in Asia, Central America and the
Caribbean, and South America, and will continue as planned with power plant development
projects in Guatemala, Peru, Argentina, Chile, and China. This business will represent
approximately 2,236 MW of operating facilities with approximately $190 mm of Proportional
EBITDA and $400 mm of Proportional Net Debt as of December 31, 2010. In addition, the
business will have compelling growth opportunities with over 1,000 MW in near term projects
under development and over 2,000 MW of mid to long-term development opportunities. The
operating assets are high quality businesses with demonstrated track records of operational and
commercial success and an emphasis on clean energy. The new business will benefit from the
inherited systems and process infrastructure of AEI, with a right-sized headquarters and
experienced local management teams.
Goldman, Sachs, & Co. and Banco Itau acted as financial advisors to AEI.
About AEI
AEI owns and operates essential energy infrastructure businesses in emerging markets
diversified across four core business segments - Power Distribution, Power Generation, Natural
Gas Transportation and Services, and Natural Gas Distribution - within five regions - Andean,
Southern Cone, Central America/Caribbean, China, and Europe/Middle East/North Africa. AEI
is currently in the process of divesting substantially all of its regulated assets. More information
can be found at www.aeienergy.com.
Investor Contact: Media Contact:
Molly Whitaker Oscar Serrate
(713) 345-5046 713-345-5048
aei.investor.relations@aeienergy.com oscar.serrate@aeienergy.com
About Iberdrola
Iberdrola is one of the largest electricity companies worldwide, with presence mainly in Spain,
the US, the UK, México and Brazil. As of September 30, 2010 the company had 44 GW of
installed capacity and 25 million electricity customers.
About EEB3
Grupo Energía de Bogotá is the number one business group in the Colombian energy sector. Its
company Empresa de Energía de Bogotá transports electricity for the Colombian market with
one of the most important and largest demands in the country. It also controls the major natural
gas transporter in Colombia, TGI S.A. In Peru, its company CONTUGAS has held the
concession for 30 years for the transportation and distribution of natural gas in the Department of
Ica. In the same country, together with the ISA group, it owns a portion of REP S.A. and
TRANSMANTARO S.A., which operate 63% of that country’s system for electric power
transmission. In 2010 it constituted TRECSA - Transportadora de Centroamérica S.A. - which
will build the most important energy infrastructure project in Guatemala and will provide the
service of electric power transmission as of 2013. It also has a portfolio of investments in
important companies in the energy sector including CODENSA S.A., EMGESA S.A., GAS
NATURAL S.A., the Empresa de Energia de Cundinamarca – EEC, the Electrificadora del Meta,
EMSA, and on a smaller scale in ISA and ISAGEN.
Contact:
Elizabeth Melo
External Relations Director
320 2227187 - 3138282225
emelo@eeb.com.co
About Corficolombiana
Corficolombiana is a merchant bank listed in the Colombian Stock Exchange that primarily
invests in strategic sectors of the Colombian economy, including infrastructure, energy,
agribusiness, hotels and also provides treasury, investment banking and private banking services.
Its main investments include stakes in Promigas (gas transport company in Colombia), Empresa
de Energía de Bogotá (Colombian electricity and gas holding), toll road operators such as Pisa
S.A., Coviandes and Ruta del Sol (second tranche) and Estelar (Colombian hotel chain). As of
December 31, 2010, Corficolombiana’s market capitalization was USD 3.1 billion.
About Sempra Pipelines & Storage
Sempra Pipelines & Storage develops, builds and operates natural gas pipelines and storage
facilities in Latin America and the United States. The company operates and/or owns more than
2,000 miles of transmission pipelines and 23 billion cubic feet (Bcf) of natural gas storage
capacity. Sempra Pipelines & Storage also manages natural gas and electricity distribution in
Argentina, Chile, Mexico, Peru and the United States. Sempra Energy, based in San Diego, is a 4
Fortune 500 energy services holding company with 2009 revenues of about $8 billion. The
Sempra Energy companies’ 13,800 employees serve about 25 million consumers worldwide.
About EPM
EPM is Colombia’s largest public utility services company, based on revenues, and the second
largest company overall, based on total assets. EPM participates in the generation, transmission,
distribution and commercialization of electricity, distribution and commercialization of natural
gas, telecommunications services and water and sewage businesses.
EPM is an industrial and commercial government-owned company that was founded on August
6, 1955. EPM provides its energy, telecommunications and water services principally in
Medellín, Colombia’s second largest city, as well as in surrounding localities. EPM also operates
in Colombia’s capital and largest city, Bogotá, as well as in other main cities in Colombia.
Outside of Colombia, EPM, as a result of the recent acquisitions in Guatemala, now owns the
largest electricity distribution and commercialization business in Central America.
EPM’s principal executive office is located at Carrera 58 No 42-125, Medellín, Colombia, and
its website address is www.epm.com.co.
About Pampa
Pampa Energía S.A. (NYSE: PAM; BCBA:PAMP) is the largest fully integrated electricity
company in Argentina. Through its subsidiaries, the company is engaged in generation (2,180
MW), high voltage transmission (10,200 miles) and distribution (2.6 million clients) of
electricity in Argentina. More information can be found at www.pampaenergia.com.
About Kulczyk
Kulczyk Investments is an international investment company based in Luxembourg. The
company is a long-term investor focused on transactions where it can add value through local
knowledge, relationships, international expertise in transforming economies and access to own
capital. Kulczyk Investments’ strategic sectors include energy and infrastructure. The company
invests in a broadly understood energy sector, from exploration and production of resources,
through power generation to power and gas distribution and trading. Its portfolio includes, inter
alia, Kulczyk Oil Ventures, Aurelian Oil and Gas, Loon Energy Corporation, Ophir Energy Plc,
KI Energy Trading, Elektrownia Północ and Strata Limited. KI also holds significant assets in
real estate, brewing, automotive and the chemical industries.