AES to buy Reliant's Brazilian holdings for $430 million

AES Corp. and EDF International SA, a unit of Electricit�e France, reported they have agreed to jointly acquire the 11.68% interest in Brazil's Light Servicos de Eletricidade SA (LSE) owned by two subsidiaries of Reliant Energy Inc. for $430 million.

An AES subsidiary will purchase about 30% of the shares to be sold while EDF will purchase the remainder. The purchase of a portion of the shares remains subject to a right of first refusal by Companhia Siderurgica Nacional (CSN) and approval by Brazilian regulatory authorities. The sale is expected to close by the end of the year.

LSE is an electric generation and distribution company, serving 2.9 million customers in and around Rio de Janeiro.

AES and its partners�CSN, EDF, and Reliant�acquired a controlling interest in LSE in 1996. The consortium purchased majority ownership in LSE when the Brazilian government privatized the company through an auction in May 1996. LSE owns controlling interest in Eletropaulo SA, an electric distribution company serving 4.5 million customers in greater Sao Paulo.

Sale of its LSE investment represents Reliant Energy's entire interest in Brazil and is part of the company's plan, announced in December 1999, to divest its Latin American investments, which are primarily regulated energy delivery businesses. The company said it plans to focus on competitive energy services businesses in the US and western Europe.

The purchase of Reliant's shares in LSE nearly completes the process of consolidating control of its Brazilian operations, said Mr. Thomas A. Tribone, AES executive vice-president. He said the last remaining step to complete the ongoing negotiations is purchase of CSN's shares.