AES Corporation (AES) has entered into agreements to sell its entire interests in Oman and Pakistan for approximately $200 million. The transactions are subject to customary purchase price adjustments and approvals and are expected to close during the first half of 2010. The deals will also allow $276 million of debt to be removed from AES’ consolidated balance sheet.
The businesses are being sold to two separate buyers as a result of an auction process that began in the second quarter of 2009. AES indirectly holds interests in the Oman and Pakistan facilities through AES Oasis, which is owned 61.1% by AES and 38.9% by the IDB Infrastructure Fund. During 2009, the Oman and Pakistan businesses are expected to contribute a net income of $25 million, or 4 cents a share, and contribute subsidiary distributions of $16 million.
They are projected to contribute a net income of $15 million, or 2 cents per share, in 2010. The sale of the Pakistan assets is expected to result in non-cash, after-tax impairment of $107 million, or 16 cents a share, in 2009. The Oman sale is expected to result in non-cash, after-tax gain of $78 million, or 12 cents per share, which will be recorded when the transaction closes in 2010.
AES will continue to have a presence in the Middle East and South Asia, where it will also pursue potential development opportunities. Earlier this year, AES brought the 380 MW Amman East combined cycle gas facility in Jordan into commercial operation and currently has 62 MW of small hydropower projects under construction in Turkey.
AES entered Pakistan in 1993 as one of the first independent power producers and began commercial operations in Oman in 2003. Arlington, Virginia-based AES Corporation is a global power company that owns and operates electric power generation and distribution businesses in many countries worldwide.
The company’s operations are divided into three segments: Regulated Utilities (combining the former Large Utilities and Growth Distribution), Contract Generation, and Competitive Supply. By fuel type, AES’s capacity portfolio is approximately 41% coal, 39% gas, 16% hydro and 4% oil. Close to 56% of its total revenue is generated in Latin America with the balance (44%) from North America, Europe, Asia, the Middle East and Africa.
Revenue is equally derived from generation and distribution, and almost 80% of generation revenue is under long-term contracts. The company has 2,500MW of core power and renewable projects construction program in the pipeline.
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