AES Gener filed a material fact with the Chilean Commission for the Financial Market today, regarding a Non-Recurring Accounting Adjustment related to its transformational strategy Greentegra and decarbonization efforts in Chile.
Below is a translation of the material fact.
AES GENER S.A. MATERIAL FACT
Santiago, September 29, 2020
Mister
Joaquín Cortez H.
President Commission for the Financial Market
Avda. Libertador Bernardo O’Higgins 1449
Ref: Non-Recurring Accounting Adjustment
_________________________
Of our consideration:
In accordance with the provisions of article 9 and the second paragraph of article 10 of Law No. 18,045, of the Stock Market, as well as General Regulation No. 30 of the Commission under your position, the undersigned, duly empowered to do so, informs as a Material Fact that, as a result of the events described below, AES Gener S.A. (“AES Gener” or the “Company”) has determined to make the non-recurring accounting adjustments that are indicated:
- On August 31, 2020, Empresa Eléctrica Angamos SpA received a net payment of US $ 720 million from Minera Escondida Limitada and Minera Spence S.A., thus materializing the agreements signed between the parties with the purpose of modifying and early terminating the energy supply contracts; and
- Considering the intention of the Company to accelerate the disconnection and cease of operations of the coal-fired units Ventanas 1 and Ventanas 2 at the earliest date that the safety and sufficiency of the system allows, subject to compliance with the conditions precedent of the Disconnection and Cease of Operations Agreement of these units.
In view of the aforementioned facts and given that these units [Angamos 1, Angamos 2, Ventanas 1 and Ventanas 2] will no longer be considered strategic assets as they will not be associated with the supply of supply contracts, constituting independent “Cash Generating Units”, AES Gener will record a loss due to the impairment of Plant Property and Equipment, which will affect the 2020 net income by approximately US $ 560 million. This non-recurring accounting adjustment will not have an impact on the Company’s cash flow.
Finally, we note that the Company has concluded that it is appropriate to record an impairment loss for the full value of its investment in its non-consolidated subsidiary, Guacolda Energía S.A. with a negative impact on the net income for the year 2020 of approximately US $ 90 million. This non-recurring accounting adjustment will not have an impact on the Company’s cash flow.
Without any other particular, best regards,
AES Gener S.A.
Ricardo Falú
Chief Executive Officer
About AES Gener
AES Gener generates and sells electricity in Chile, Colombia, and Argentina with the mission of improving lives by accelerating a safer and greener energy future. The Company operates a total installed capacity of 5,299MW in the region along with an extensive portfolio of renewable energy projects under development. The Company is the largest generator in Chile in 2020, with a diversified portfolio including hydro, wind, solar, energy storage, biomass, gas, and coal-fired power plants.
AES Gener owns and operates 3,615MW in Chile, comprised of 3,068MW of thermoelectric, 271MW of hydroelectric, 110MW of wind, 92MW of solar photovoltaic and 13MW of biomass capacity, in addition to 62MW of battery energy storage systems, seawater desalination plants, transmission lines, and gas pipelines. AES Gener also owns hydroelectric and solar plants in Colombia with a total capacity of 1,041 MW and a combined-cycle natural gas plant in Argentina with an installed capacity of 643 MW.
AES Gener is 66.7% owned by The AES Corporation.
To learn more about AES Gener, please visit www.aesgener.cl/investors