Central Termica San Nicolas SA

distressed

At the time of its privatization, the company owned a 650-MW thermal power plant and two power sales contracts which represent a total of 345-megawatts of electricity or 55% of its total output capability. The contracts, beginning in 1993, were set to expire in seven years. The company was privatized in two stages. In the first stage (April 1993), an 88% equity stake was sold for $66.1 million to AES, CMS Generation, CEA, and Ormas SAICIC. The winning consortium also assumed $61 million in debt. AES acquired the entire 88% stake from its other partners in 1995. In the second stage, 12% of the equity was sold to its workers. Central Termica San Nicolas (CTSN) consists of five operational generating units, two of which are fueled with oil and coal, two of which can be fueled with oil or natural gas, and one of which is 350-megawatts and can burn on oil, natural gas, or coal and petroleum coke blend. Electricity not sold under contract is sold on the Argentina spot market. CTSN obtained a $60 million loan in December 1, 1996 to finance the construction of a power plant. In 2002, AES Corporation filed legal proceedings with an international arbitration tribunal (International Centre for Settlement of Investment Disputes - ICSID) against the Argentinean government. The proceeding seeks compensation for losses incurred by the company at the time of the devaluation of the Argentinean currency. For updates on the international arbitration proceedings, check http://www.worldbank.org/icsid (cases # ARB/02/17). None