CPFL Energia SA has agreed to buy 100% equity interest in Brazilian power distributor AES Sul from AES Corporation.
The transaction is expected to be closed in the second half of 2016 for a total amount of R$1.698 billion (US$503 million). The deal is subject to approval by CPFL Energia’s shareholders and customary regulatory approvals.
AES Sul is headquartered in Porto Alegre in the Brazilian state of Rio Grande do Sul. The firm's concession area covers 99,512 km2, serving 118 municipalities, 1.2 million clients and a population of some 4.5 million in the state. It owns and operates 48 substations, 1,62 0km of transmission lines, and a 53,500-km distribution network.
Andrés Gluski, AES President and Chief Executive Officer, stated:
“The sale of our distribution company, Sul, in Brazil is yet another step we are taking to optimize our portfolio for future value creation. We are proud of the work we have done at Sul over the past 19 years to improve safety, systems and operations, but believe that today we can best serve our shareholders by re-deploying our capital in other businesses and to de-risk the company.”
This sale was previously included in the Company’s 2016 guidance and 2017-2018 expectations. Additionally, the transaction will remove a total of $335 million in non-recourse debt on AES’ Balance Sheet as of March 31, 2016.