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(AES) - Get The AES Corporation Report

plunged 32% Tuesday as investors read desperation in its latest plan to cut costs and raise money.

AES said it will sell assets in an effort to raise up to $1.5 billion in extra cash and cut enough costs to avoid having to tap capital markets. The news comes as more and more companies, particularly in the energy sector, have had to sell equity and debt to ease liquidity concerns.

"While these moves are a positive given the liquidity concerns in the market, they also indicate to us that the company's financial condition could be more tenuous than originally expected," said Ronald Barone, an analyst at UBS Warburg, in a research note Tuesday.

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AES tumbled 26% on Friday after Fitch downgraded the company's debt ratings and S&P put them on "credit watch with negative implications," noting its Latin American exposure.

AES said it would reposition itself by fully contracting or divesting its merchant generation business, as well as reducing its exposure to Latin America, where it will sell certain businesses.

"Given today's market climate, we are going to rely on the cash flows of our solid operating businesses," said Dennis Bakke, chief executive officer of AES, in a written statement.

AES said it hopes rely on internally generated cash flow, rather than being dependent on capital markets. But investors weren't comforted by the news: AES closed down $2.25, or 32.14%, to $4.75.

The power company also said margin calls caused by a sharp drop in its share price led to stock sales by several of its top executives.

Bakke, the company's CEO, plans to sell 7 million shares to satisfy a $36 million loan. Other officers' sales in the aggregate are expected to be less than 500,000 shares, the company said.