AEI Nears Deal with Consortium

Ashmore Energy International (AEI) could sign a deal to sell its assets to a consortium led by Iberdrola as soon as next week, according to sources familiar with the situation. AEI is heard to be looking to sell its assets for “a little more” than $4bn, half the $8bn price tag originally quoted in press reports. One banker away from the deal describes pricing as cheap for a company with $1.1bn in adjusted Ebitda for 2009 on $8.2bn in revenues. It is frequently compared to public US peer AES, with $4.6bn in Ebitda on $16.2bn of revenues for the last 12 months as of September 30, 2010. It was last trading at a market cap of around $10.22bn. The Houston-based energy company with assets in South America, Europe, Asia, the Middle East and Africa, had tried listing on NYSE in 2009. The offering would have given the company a market cap of $3.2bn, down from initial pricing of $3.9bn. Citi is lead advisor to the Iberdrola consortium, with Santander as a co-lead. Goldman Sachs is leading the sale, with Itau also advising the sellers. Brazilian power generation and distribution companies Neoenergia and CPFL are also heard to be part of the consortium. They are looking at AEI’s Elektro asset, a power generation and distribution company in Brazil. Previ, the Brazilian pension fund, owns stakes in both Neoenergia and CPFL and is understood to be active in the negotiations.