AES raises $1.58B with China Investment

Arlington, Va.-based power company AES said today it entered into a stock purchase agreement with a subsidiary of Beijing-based China Investment to raise $1.58 billion of new equity to fund growth opportunities in the power sector.

When the agreement closes, state-owned China Investment is expected to acquire 125.5 million shares of AES stock at $12.60 per share, for a 15 percent stake in the company.

AES (NYSE:AES) also signed a letter of intent with China Investment to raise an additional $571 million of equity for an approximate 35 percent interest in its wind generation business.

“Having [China Investment] 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,” said AES CEO Paul Hanrahan, in a news release.

AES owns and operates power generation and distribution businesses in 29 countries, with an interest in investing in renewable energy and emerging markets (see AES, Riverstone in $1B solar venture and AES buys landfill gas project in El Salvador). More than two-thirds of its revenue comes from outside the United States.

Last year, AES increased its China-based wind power operations with two new agreements with Beijing-based wind power developer Guohua Energy Investment (see AES boosts wind capacity in China).

Following regulatory approvals, the deals are expected to be completed in the first half of 2010.

AES's stock closed at $14.03 today, up 1.23 percent.

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