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March 7, 2008 |
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AES CORP: Defaults on Debt Facilities due to Misrepresentation The AES Corporation is in default under its senior secured credit facility and its senior unsecured credit facility due to a breach of representation related to its financial statements as set forth in the credit agreements. As a result, US$200 million of the debt under the company's senior secured credit facility will be classified as current on the balance sheet as of Dec. 31, 2007. There are no outstanding borrowings under the senior unsecured facility. The company will seek a waiver of these defaults from its lenders under these facilities. The company may not borrow additional funds under either of these facilities until it obtains the waiver. The company would delay the filing of its 2007 Annual Report on Form 10-K with the Securities and Exchange Commission. The company discloses that it is still preparing its financial statements as a result of its efforts to remediate the disclosed material weaknesses. In addition, the company relates that financial statements for the years ended Dec. 31, 2005, and 2006, of the company's independent registered public accounting firm, Deloitte & Touche LLP, could no longer be relied upon. Although the company provides no assurance that it will able to file its 2007 Form 10-K within the 15 calendar day extension period it relates that the Form 10-K will be filed within the extension period. About AES Corporation AES Corporation -- http://www.aes.com/ -- a global power company, operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for over ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. The company has Latin America operations in Argentina, Brazil, Chile, Dominican Republic, El Salvador and Panama. * * * The AES Corporation still carries Moody's Investors Service's Corporate Family Rating and the senior unsecured rating assigned at B1. As of Feb. 6, 2008, the company still carries Fitch's 'BB/RR1' rating on US$500 million issue of senior unsecured notes due 2017. |
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