Kazakhmys Buying Power Plant, Coal Mine From Aes for $1.5 Bln
ALMATY. Feb 5 (Interfax) – Kazakhmys, Kazakhstan’s leading copper producer, is buying the Ekibastuz GRES state district power plant and the coal Maikuben coal mine, both of which are located in the Pavlodar region, from AES corporation for $1.5 billion, Kazakhmys said in a statement posted on the website of the London Stock Exchange (LSE).
The statement said that Kazakhmys was announcing the signing of an agreement with AES for the acquisition of the Ekibastuz electricity station and the Maikuben coalmine in Kazakhstan for $1.5 billion. In order for the acquisition to be finalized, it is necessary to receive the authorization of the Kazakh government.
Kazakhmys intends to finance the purchase through loan funds, which the company will raise from a $2.1 billion syndicated loan payable in five years. Deutsche Bank has been appointed to coordinate the syndicated loan. Participating in the loan syndicate are ABN Amro, Barclays, BNP Paribas, Calyon, Commerzbank, Deutsche Bank, Dresdner Bank, ING, Natixis, Societe Generale Corporate & Investment Banking, Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi UFJ and WestLB.
According to the agreement signed between the parties, AES will act as the management company for Ekibastuz GRES until the end of 2010.
In addition, an AES statement said that following the acquisition’s completion, the company would receive $1.1 billion and have the possibility of receiving additional compensation of up to $381 million in three years. As a result, AES will retain ownership and management of energy production and distribution assets in Eastern Kazakhstan.
The sale will require the approval of regulatory bodies and a third party, as well as customary adjustment in the buying price, the AES statement said. The purchase will be finalized in the second quarter of 2008.
AES acquired Ekibastuz GRES and the Maikuben coalmine in 1996 and 2001, respectively. Since 1996, AES has invested $200 million into its program for modernizing these production facilities.
In addition, as of 1997, AES has owned Ust-Kamenogorsk and Sogrin CHP plants in the Eastern Kazakhstan region. The Kazakh government, as compensation, transferred two hydroelectric plants, Ust- Kamenogorsk and Shulbin, to AES for 20 years.
In 1999, according to an agreement signed with the Kazakh government, two regional power distribution companies, East Kazakhstan and Semipalatinsk were transferred to AES subsidiary, AES Silk Road.
Kazakhmys is Kazakhstan’s largest copper producer. The corporation consists of four production companies: Zhezkazganstvetmet, Balkhashtsvetmet, Vostoktsvetmet and Karagandatsvetmet. The company also has oil and gold production subsidiaries.
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