AES Southern Europe Holdings, B.V., a subsidiary of
The AES Corporation
(
AES
), has completed the sale of its 34.5 MW St. Patrick wind farm and
its minority share of InnoVent SAS for approximately $42 million to
Boralex Europe S.A. AES Corporation has sold its French interests
in wind generation assets, with a cumulative capacity of 73MW.
The St. Patrick wind farm is located in the Nord-Pas-de-Calais
and Picardie regions of France. The wind farm was built between
July 2009 and February 2010. Under long-term contracts that will
expire in 2024 and 2025, the energy generated is sold to
Electricite de France.
In October 2006, The AES Corporation had purchased a minority
interest in InnoVent SAS which is an independent, privately held
developer of wind energy projects in France. Currently, it controls
114 MW of wind assets that are either in operation or under
construction.
AES Corporation is a global power company that is spread over 27
countries in five continents. The wide geographical presence
represents a diversified earnings base. Its main rationale behind
selling these assets is to exit from some markets so that it can
focus on those regions where it has a better competitive advantage.
The company has once again proved that it is focused on maximizing
shareholder returns. The company plans to use the sale proceeds in
paring debt, investing in new businesses and repurchasing
shares.
AES Corporation's diversified nature has resulted in a portfolio
that is well-positioned for capitalizing on regional differences in
power prices and weather-driven demand. This protects the company
from specific risks in any single region or country. Also, the
company's acquisition of DPL Inc. would boost its regulated
electricity business in the North American market.
However, we remain concerned about commodity price risk and
currency volatility. Moreover, it is a non-dividend paying stock.
Therefore, we prefer to remain on the sidelines and suggest
investors to wait for a favorable entry point. The company
presently retains a short-term Zacks #3 Rank (Hold) that
corresponds with our long-term Neutral recommendation on the
stock.
The company mainly competes with
Duke Energy Corporation
(
DUK
) and
Edison International
(
EIX
).
AES CORP (AES): Free Stock Analysis Report
DUKE ENERGY CP (DUK): Free Stock Analysis
Report
EDISON INTL (EIX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research