HBJ reports on the exciting news:
A global energy power player led by a former Enron executive is plugging into an initial public offering.
AEI, registered in the Cayman Islands with operational headquarters in Houston, has filed with federal regulators to raise as much as $862.5 million and gain a listing on the New York Stock Exchange.
The timing and size of the offering are regarded as positive signs by analysts who see the IPO market beginning to thaw out after being frozen shut since August 2008 (see related box below).
Starting with the assets of a predecessor company, Prisma Energy International Inc., AEI has quietly grown into a multinational utilities giant in the power distribution and natural gas pipeline industries.
Prisma Energy emerged from the ashes of Enron Corp. after the once high-flying Houston corporation crashed in late 2001. Since then, Prisma and subsequently AEI focused on electrical power and natural gas distribution and generation, and also owns retail fuel centers.
While based in Houston, AEI does business in emerging international markets, with operations in 19 countries spread across Latin America, Europe and Asia.
AEI generated $9 billion in revenue in 2008 from more than 50 subsidiaries and other operating companies from China to Jamaica in which it has invested, according to the filing.
In a May transaction, AEI acquired a 19 percent stake in Emdersa, an Argentine power distribution holding company, in exchange for cash and AEI shares.
Oscar Serrate, an AEI spokesman, cited regulatory requirements in declining to comment further on the filing or the company’s business model.
essence of EnronJames Hughes joined AEI in 2007 as chief operating officer and was appointed to his current position as CEO later that year.
A former securities attorney in Dallas and Poland, Hughes spent a decade with Enron, as president and chief operating officer of Enron Global Assets and also as general counsel of Enron International. Hughes was later Prisma Energy’s president through 2004.
The largest AEI individual stockholder is high-profile energy executive Ronald Haddock, with 1.5 million shares. Haddock, AEI’s chairman of the board, was the company’s CEO from 2003 to 2006.
A former Enron director, Haddock has several decades in the energy business, with lengthy stints at Exxon and later at FINA, where he was CEO from 1989 to 2000.
Other former Enron executives in key AEI positions include: Brian Zatarain, executive vice president for risk management, who worked in international business development at Enron; and Brian Stanley, executive vice president of operations, who previously oversaw all of Enron’s power plant operations and was CEO of Enron Engineering & Operational Services, responsible for global construction and operation of power generation and natural gas processing facilities.
British wealth management and investment firm Ashmore Investment Management Ltd. is AEI’s largest shareholder, with a 55 percent stake.
AEI was spawned in early 2006 when Ashmore transferred certain energy interests to an affiliate, Ashmore Energy International LLC. Ashmore Energy then purchased Prisma Energy from Enron for $1.8 billion in two stages in May and September of that year. Prisma Energy was the last of the three key business entities under Enron’s bankruptcy plan to be distributed to creditors or sold.
After the sale, the combined Ashmore-Prisma Energy entity was reincorporated in the Cayman Islands and changed names to Ashmore Energy International, which more recently was shortened to the existing AEI.
Financial disclosures in the IPO prospectus show:
• Power distribution is AEI’s most lucrative business, contributing 52 percent of earnings before income taxes, depreciation and amortization, or EBITDA, in 2008. Geographically, South America is AEI’s most lucrative market, with Brazil and Colombia accounting for 71 percent of EBITDA last year.
• Total revenue dipped to $3.7 billion for the first six months of 2009 compared to $4.6 billion for the year-earlier period, but income before taxes remained constant at about $348 million in both periods.
• AEI focuses on emerging markets for their long-term growth potential, based on those countries’ need for large-scale infrastructure development, and has spent $1.5 billion since early 2007 to acquire well-positioned power and energy companies in those markets.
• Considering the company’s large number of operating subsidiaries, AEI carries a debt load of nearly $3 billion.
Power rivals and pitfallsEmerging market infrastructure development is attracting plenty of interest, says Travis Miller, senior equity analyst with Morningstar Inc.
I am PSYCHED. I want a job with them. Pronto.
Also, have you noticed how long it has been since we heard about any IPOs? I blame the lack of IPOs on Sarbanes-Oxley, which of course, people blame on Enron. But this harsher business environment makes the barriers to going public too much trouble, so small companies stay private. Thanks, government!
