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AES: Sells Sul for some $464MM; proceeds likely to be redeployed to new accretive projects; we’d like to see it remain in Brazil
· AES announced its agreement to sell Companhia Centro-Oeste de Distribuicao de Energia Electrica (Sul), a distribution company in the Brazilian state of Rio Grande do Sul, which has about 1.3MM metered customers.
· The sale price would be approximately $464MM based on expected currency exchange rates (or for REAL1,698) and some $335MM of non-recourse project finance debt would be assumed by the buyer. Therefore, the net benefit to AES shareholders is expected to be some $799MM.
· The buyer is CPFL Energia S.A. (NYSE: CPL) and the transaction is expected to close in 2H2016, subject to customary regulatory approvals and shareholder vote at CPL.