Empresa Provincial de Energia La Plata SA

distressed

Edelap was part of Servicios Electricos del Gran Buenos Aires (Segba), an Argentine state-owned utility. Edelap distributed electricity to 228,000 customers and had a 68-MW gas power plant called Dique (La Plata) in 1992. The company was partially privatized in November 1992 when a 51% equity stake was sold for $139 million to Inversiones Catalinas or Grupo Techint (26%) and Houston Power Corporation (25%). Edelap increased its customers base to 270,000 with investments through 2000. In May 1998 AES Corporation acquired a 90% stake in Edelap for US$ 350 million. AES acquired the shares from the joint venture of Houston Industries Energy and a subsidiary of Techint S.A. In November 1998 PSEG Global acquired a 30% share in Edelap. In 2001, PSEG agreed to sell its shares in Edelap and its other shares in Argentina to AES. The sale did not occur until 2003 as AES contested that the stock purchase was of high risk. AES and PSEG reached agreement whereby AES acquired all of PSEG's shares in Argentina. As of 2003, AES held a 90% stake with the remainder of shares (10%) belonging to the employees. In 2003, Edelap served 280,000 customers and had a capacity of 2100 GwH. 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. Still pending in 2009. For updates on the international arbitration proceedings, check http://www.worldbank.org/icsid (case # ARB/02/17).