AES Corporation is a Fortune 500 company that generates and distributes electrical power. It was founded on January 28, 1981, as Applied Energy Services by Roger Sant from the US Federal Energy Administration and Dennis Bakke from the Office of Management and Budget. It is headquartered in Arlington, Virginia. AES Corporation is one of the world's leading power companies, generating and distributing electric power in 31 countries and employing 27,000 people worldwide.
In 2008, AES Corporation's total revenue was 16.1 Billion, of which $9.11B came from the company's Power Generation division,and $6.99B from Utilities.
In April 2010, AES Wind Generation, a wholly owned subsidiary of AES, acquired UK-based wind developer Your Energy (YEL) and has also signed an agreement to buy a 51% stake in a wind portfolio from 3E, a Polish wind developer. This move will add more than 700MW to AES Wind Generation’s European pipeline.
Distribution Strategy
AES signed agreements for the financing of its $300 million, 450 MW combined cycle gas-fired Meghnaghat power plant in Bangladesh. In April, a subsidiary of AES completed a $180 million financing for its 360 megawatt gas-fired combined cycle facility Haripur in Bangladesh. In April, AES announced the completion of its acquisition of IPALCO in Indiana. In March, a subsidiary of AES secured the financing for the 720 MW gas-fired Granite Ridge project in New Hampshire. In March, a subsidiary of AES acquired from EniChem SpA an oil-fired 140MW cogeneration facility in the town of Ottana, which is in the province of Nuoro, Sardinia, Italy. In February, a subsidiary of AES entered an agreement to purchase all of the energy assets of Thermo Ecotek Corporation, a wholly owned subsidiary of Thermo Electron Corporation of Waltham, Massachusetts for $195 million. In January, AES announced the start of construction of the $300 million AES Wolf Hollow power plant at a site in Granbury, Texas. In January, a subsidiary of AES acquired a majority interest in a 290MW barge-mounted natural-gas-fired electric generating business in Lagos, Nigeria. In January, AES Huntington Beach submitted a proposal to the California Energy Commission to restart two retired gas-fired units that will add an additional 450 megawatts of generation in the electricity-strapped state of California. In January, AES announced the purchase of an additional 39% ownership interest in Hidroelectrica Alicura, a 1000 MW hydro plant in Argentina. In January, AES announced that it had successfully completed its offer to exchange all American Depositary Shares of Gener S.A. for AES common stock.
AES TO ACQUIRE ELECTRIC DISTRIBUTION COMPANY IN UKRAINE
Completion of the acquisition is subject to an official review of the bid by the Ukraine State Property Fund and the execution of Sale and Purchase Agreement. In 2000, Kievoblenergo distributed 3,840 GWh to 763,000 customers.
Kievoblenergo is one of six distribution companies that are being privatized this month by the government of the Ukraine. Kievoblenergo is the largest of the 20 distribution companies slated to be sold under Ukraine's privatization program.
Mr. Garry Levesley, Vice President of AES, stated, "The acquisition of Kievoblenergo represents our first successful step into the Ukraine energy market.Our experience in operating 13 generating and distribution businesses in Kazakhstan and The Republic of Georgia has prepared us well for entry into this promising market."
Mr. Dennis W. Bakke, President and CEO of AES, stated, "We are pleased with this winning bid in Ukraine, which comes after five years of our involvement in the Ukraine while the government has contemplated opening up the electric sector to private companies and competition. We hope that AES can bring its skills, creativity and its passion to improve the contribution of this business to the people of the Ukraine."
Over the past few months, AES directors considered several moves, including going outside the company for a new CEO. Last week, it accepted Bakke's offer to resign and his suggestion that Hanrahan take over, according to AES director Robert H. Waterman Jr. The selection was made final yesterday.
"Dennis took us through an era of rapid growth and expansion. His instincts go in that direction," said Waterman, a founding director of AES and co-author of the best-selling business book "In Search of Excellence."
"We worked on this very definitely together. In the end, Dennis volunteered to step down," Waterman added.
"The world has changed, especially our industry," Bakke said in an interview. He said he had wrestled with his role at AES since last fall, when the company surprised investors with the magnitude of its losses in South America. "I thought we needed a different kind of leadership," he added.
Bakke, who will remain on the board, was voted a $9 million severance package by the board, payable over the next 15 years. He received no cash compensation as CEO for years, taking his pay in the form of stock options. As of February, he was the company's largest shareholder, with about 6.2 percent of the outstanding stock.
Hanrahan said his top priority will be to generate cash through cost controls, centralized purchasing and asset sales. AES bonds have been selling for about 65 cents on the dollar recently; the company's goal is to bring the price to par over the next year to 18 months. On June 6, Standard & Poor's reduced its rating on AES's corporate credit and senior unsecured debt one notch, to BB-minus, three levels below investment grade.
In 2008, AES Corporation's total revenue was 16.1 Billion, of which $9.11B came from the company's Power Generation division,and $6.99B from Utilities.
In April 2010, AES Wind Generation, a wholly owned subsidiary of AES, acquired UK-based wind developer Your Energy (YEL) and has also signed an agreement to buy a 51% stake in a wind portfolio from 3E, a Polish wind developer. This move will add more than 700MW to AES Wind Generation’s European pipeline.
Distribution Strategy
AES signed agreements for the financing of its $300 million, 450 MW combined cycle gas-fired Meghnaghat power plant in Bangladesh. In April, a subsidiary of AES completed a $180 million financing for its 360 megawatt gas-fired combined cycle facility Haripur in Bangladesh. In April, AES announced the completion of its acquisition of IPALCO in Indiana. In March, a subsidiary of AES secured the financing for the 720 MW gas-fired Granite Ridge project in New Hampshire. In March, a subsidiary of AES acquired from EniChem SpA an oil-fired 140MW cogeneration facility in the town of Ottana, which is in the province of Nuoro, Sardinia, Italy. In February, a subsidiary of AES entered an agreement to purchase all of the energy assets of Thermo Ecotek Corporation, a wholly owned subsidiary of Thermo Electron Corporation of Waltham, Massachusetts for $195 million. In January, AES announced the start of construction of the $300 million AES Wolf Hollow power plant at a site in Granbury, Texas. In January, a subsidiary of AES acquired a majority interest in a 290MW barge-mounted natural-gas-fired electric generating business in Lagos, Nigeria. In January, AES Huntington Beach submitted a proposal to the California Energy Commission to restart two retired gas-fired units that will add an additional 450 megawatts of generation in the electricity-strapped state of California. In January, AES announced the purchase of an additional 39% ownership interest in Hidroelectrica Alicura, a 1000 MW hydro plant in Argentina. In January, AES announced that it had successfully completed its offer to exchange all American Depositary Shares of Gener S.A. for AES common stock.
AES TO ACQUIRE ELECTRIC DISTRIBUTION COMPANY IN UKRAINE
Completion of the acquisition is subject to an official review of the bid by the Ukraine State Property Fund and the execution of Sale and Purchase Agreement. In 2000, Kievoblenergo distributed 3,840 GWh to 763,000 customers.
Kievoblenergo is one of six distribution companies that are being privatized this month by the government of the Ukraine. Kievoblenergo is the largest of the 20 distribution companies slated to be sold under Ukraine's privatization program.
Mr. Garry Levesley, Vice President of AES, stated, "The acquisition of Kievoblenergo represents our first successful step into the Ukraine energy market.Our experience in operating 13 generating and distribution businesses in Kazakhstan and The Republic of Georgia has prepared us well for entry into this promising market."
Mr. Dennis W. Bakke, President and CEO of AES, stated, "We are pleased with this winning bid in Ukraine, which comes after five years of our involvement in the Ukraine while the government has contemplated opening up the electric sector to private companies and competition. We hope that AES can bring its skills, creativity and its passion to improve the contribution of this business to the people of the Ukraine."
Over the past few months, AES directors considered several moves, including going outside the company for a new CEO. Last week, it accepted Bakke's offer to resign and his suggestion that Hanrahan take over, according to AES director Robert H. Waterman Jr. The selection was made final yesterday.
"Dennis took us through an era of rapid growth and expansion. His instincts go in that direction," said Waterman, a founding director of AES and co-author of the best-selling business book "In Search of Excellence."
"We worked on this very definitely together. In the end, Dennis volunteered to step down," Waterman added.
"The world has changed, especially our industry," Bakke said in an interview. He said he had wrestled with his role at AES since last fall, when the company surprised investors with the magnitude of its losses in South America. "I thought we needed a different kind of leadership," he added.
Bakke, who will remain on the board, was voted a $9 million severance package by the board, payable over the next 15 years. He received no cash compensation as CEO for years, taking his pay in the form of stock options. As of February, he was the company's largest shareholder, with about 6.2 percent of the outstanding stock.
Hanrahan said his top priority will be to generate cash through cost controls, centralized purchasing and asset sales. AES bonds have been selling for about 65 cents on the dollar recently; the company's goal is to bring the price to par over the next year to 18 months. On June 6, Standard & Poor's reduced its rating on AES's corporate credit and senior unsecured debt one notch, to BB-minus, three levels below investment grade.