AES reaches agreement to sell majority of its solar power business

Source: AES Corp.

AES Corporation (AES) has entered into a definitive agreement with SunEdison (NYSE: SUNE) to sell its 50% stake in 336 MW of solar photovoltaic (PV) projects owned by Silver Ridge Power, LLC (Silver Ridge), a joint venture between AES and Riverstone Holdings LLC. Under the agreement, AES will sell its interest in solar PV projects in operation and under development in Europe, India and the United States for an equity purchase price of $165 million.

SunEdison also has an option to acquire AES’ 50% ownership in 130 MW of solar PV projects in Italy for an additional $42 million by August 2015. This agreement does not include the sale of AES’ 50% stake in the remaining 55 MW of solar PV projects in Puerto Rico and Spain.

In addition, as announced in October 2013, AES will receive approximately $50 million in proceeds from Google’s tax equity investment in Silver Ridge’s 266 MW Mount Signal project in California, which achieved commercial operation in April 2014.

“This transaction is another example of how we are continuing to simplify our portfolio and unlock the value of our assets,” said Andrés Gluski, AES President and Chief Executive Officer. “We plan to use the proceeds in-line with our strategy with the aim of maximizing total shareholder returns.”

These transactions were assumed in the Company’s 2014 guidance and are expected to be modestly accretive in 2015 and beyond. The transaction with SunEdison is subject to purchase price adjustments and customary regulatory approvals, including Federal Energy Regulatory Commission (FERC) approval and an antitrust review under the Hart-Scott-Rodino (HSR) Act. These approvals are expected in late June 2014.

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