AES Corporation
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AES CORP : Regulation FD Disclosure, Other Events (form 8-K)

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07/31/2017 | 10:51 pm

Item 7.01 Regulation FD Disclosure.

The AES Corporation (the "Company" or "AES") is providing an update on the Alto
Maipo project in Item 8.01 below. On May 8, 2017, when the Company provided its
2017 guidance and expectations through 2020, the Company had already
substantially reduced its expectations for Alto Maipo. Today, the Company is
reaffirming its prior guidance and expectations through 2020 for all metrics,
including Adjusted EPS and Free Cash Flow.

The information set forth above is furnished pursuant to Item 7.01 and shall not
be deemed "filed" for any purpose, including for the purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that Section. The information in Item
7.01 of this Current Report on Form 8-K shall not be deemed incorporated by
reference into any filing under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act regardless of any general incorporation
language in such filing.

Item 8.01 Other Events.

sPower Acquisition Close

On July 25, 2017, the Company and Alberta Investment Management Corporation
("AIMCo"), on behalf of certain of its clients, announced that certain of their
subsidiaries and affiliates, as applicable, completed the previously announced
acquisition of FTP Power LLC d/b/a sPower ("sPower") for approximately $853
in cash, subject to adjustment, plus the assumption of $724 million in
sPower's non-recourse debt, pursuant to a merger agreement, dated February 19,
, with the majority member of sPower, an affiliate of Fir Tree Partners
("the Majority Member"). Following the completion of the acquisition, the
Company and AIMCo each independently own slightly below 50% equity interests of
sPower. The sPower portfolio includes 1,287 MW (DC), 1,006 MW (AC), of solar and
wind projects in operation or under construction and a development pipeline of
approximately 10,000 MW (AC) located in the United States.

Alto Maipo Update

As disclosed in the Company's Form 10-Q for the period ended March 31, 2017,
Alto Maipo in Chile has experienced construction difficulties, which at the time
of the 10-Q had resulted in an increase in the projected cost for the project of
up to 22% of the original $2 billion budget. These overages led to a series of
negotiations with the intention of restructuring the project's existing
financial structure and obtaining additional funding. On March 17, 2017, the
Company completed the legal and financial restructuring of Alto Maipo. As a part
of this restructuring, AES Gener simultaneously acquired a 40% ownership
interest from Minera Los Pelambres ("MLP"), a noncontrolling shareholder, for a
nominal consideration, and sold a 6.7% interest to one of the project's
construction contractors. Through its 67% ownership interest in AES Gener, the
Company now has an effective 62% indirect economic interest in Alto Maipo.
Additionally, certain construction milestones were amended and if Alto Maipo is
unable to meet these milestones, there could be a material impact to the
financing and value of the project. For additional information on risks
regarding construction and development, refer to Item 1A-Risk Factors-Our
Business is Subject to Substantial Development Uncertainties of the Company's
2016 Annual Report on Form 10-K.

Following the restructuring described above, the project continued to face
construction difficulties, including greater than expected costs and slower than
anticipated productivity by construction contractors towards the agreed-upon
milestones. Furthermore, during the second quarter of 2017, as a result of the
failure to perform by one of its construction contractors, Constructora Nuevo
Maipo S.A.
("CNM"), Alto Maipo terminated CNM's contract and is seeking a
replacement contractor to complete CNM's work. Alto Maipo is currently a party
to legal proceedings concerning the termination of CNM and related matters,
including but not limited to Alto Maipo's draws on letters of credit securing
CNM's performance under the parties' construction contract, totaling $73 million
(the "LC Funds"). The LC Funds were recently collected by Alto Maipo, but CNM
may attempt to require Alto Maipo to escrow the LC Funds. The Company cannot
anticipate the outcome of the legal proceedings. As a result of


the termination of CNM, Alto Maipo's construction debt of approximately $615
is in technical default and will be presented in current liabilities on
the balance sheet as of June 30, 2017.

Construction at the project is continuing and Alto Maipo is working to resolve
the challenges described above. Alto Maipo is seeking a replacement contractor
to complete CNM's work, and continues to maintain a dialogue with lenders and
other parties. However, there can be no assurance that Alto Maipo will succeed
in these efforts and if there are further delays or cost overruns, or if Alto
Maipo is unable to reach an agreement with the non-recourse lenders or other
parties, there is a risk that these lenders would seek to exercise remedies
available as a result of the default noted above, or that Alto Maipo would not
be able to meet its contractual or other obligations and would be unable to
continue with the project. If any of the above should occur, there could be a
material impairment for the Company. The carrying value of the long-lived assets
and deferred tax assets of Alto Maipo as of March 31, 2017 was approximately
$1.2 billion and $60 million, respectively. The Company has invested
approximately $360 million in Alto Maipo and has an additional equity commitment
of $55 million to be funded as part of the March restructuring described above.

Safe Harbor Disclosure

This current report on Form 8-K contains forward-looking statements within the
meaning of the Securities Act and of the Exchange Act. 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 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 achievements of planned productivity improvements and
incremental 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 Discussions & Analysis in AES' 2016 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.

Any Stockholder who desires a copy of the Company's 2016 Annual Report on Form
10-K dated on or about February 27, 2017 with the SEC may obtain a copy
(excluding Exhibits) without charge by addressing a request to the Office of the
Corporate Secretary
, The AES Corporation, 4300 Wilson Boulevard, Arlington,
22203. Exhibits also may be requested, but a charge equal to the
reproduction cost thereof will be made. A copy of the Form 10-K may also be
obtained by visiting the Company's website at


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