Power generation company AES Corporation (NYSE: AES) announced it will raise $1.58 billion by selling approximately 15% of the company to an investment subsidiary of China Investment Corporation (CIC).
The company said it will use the new equity to fund growth opportunities, including investments in renewable energy.
At close, CIC will acquire 125.5 million shares of AES stock for $12.60 per share for an approximate 15% stake in the company. AES also announced the signing of a letter of intent with CIC to raise an additional $571 million of equity for an approximate 35% interest in its wind generation business.
AES, with headquarters in Arlington, Virginia, owns and operates a diverse portfolio of power generation and distribution businesses in 29 countries. More than two-thirds of AES’ revenue is generated outside of the United States.
Following the closing, CIC will nominate a director to join the AES board, which currently has ten members.
Paul Hanrahan, President and CEO of AES, stated, “We see tremendous potential for growth in meeting demand for affordable and sustainable power throughout the world. Having CIC as a partner will enhance our financial flexibility, provide capital needed to move more quickly on our project development pipeline, and offer broader access to high quality investment opportunities.”
The stock purchase agreement is subject to completion of regulatory reviews and receipt of applicable approvals, including the Committee on Foreign Investment in the United States (CFIUS) and the antitrust review under Hart-Scott-Rodino Act. Approvals are expected to be completed during the first half of 2010.
CIC is an investment institution established in September 2007. For more information, visit the website below.
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