AES Sells Stake To China Sovereign Fund For $1.58B

ARLINGTON, Va. (AP) — Global power company AES Corp. said Friday it is selling a 15 percent stake in itself to China's investment arm for $1.58 billion in a move to raise cash to develop projects around the world.

AES also said its third-quarter profit jumped 28 percent year-over-year, as improved performance by its generation businesses in Chile and the Philippines and its Brazilian utilities offset weak demand and prices in North America.

AES provides power in 29 countries, with more than two-thirds of its revenue generated outside of the U.S. China Investment Corp. will acquire 125.5 million shares of AES stock for $12.60 each, representing a 9 percent discount to the stock's Thursday closing price of $13.86. The company also signed a letter of intent with CIC to raise $571 million of equity for an approximate 35 percent stake in AES' wind generation business.

In September, The Wall Street Journal, citing people familiar with the matter, reported CIC's interest in AES.

The move by CIC, which has about $300 billion in assets, reflects China's attempt to diversify its $2 trillion in foreign currency reserves. CIC and other state-controlled companies have been buying assets around the world, including oil and gas companies and stakes in financial companies. As part of the deal, CIC will get a seat on the company's board of directors.