Subject to compliance with certain conditions precedent, Alto Maipo SpA (hereinafter “Alto Maipo”), subsidiary of AES Gener S.A., has successfully completed the financial restructuring process of the Alto Maipo Hydroelectric Project (hereinafter the “Project”). This process contemplates a lump sum, fixed price contract with Strabag, which assumes the geological and construction risks of the Project; with guaranteed completion dates and financial and corporate guarantees provided by Strabag to Alto Maipo. This financial restructuring will allow to fully cover the costs of the Project. The Company had already informed that Commission of the progress of said process in the Material Facts of July 31 and November 27, 2017. Although the documentation of this process with the lenders, contractors and owners of the project, has been signed, the finalization of the financial transaction is subject to wire transfers and other conditions which we expect to be fulfilled today.
1. One of the essential elements in this restructuring process was the signing on February 19, 2018, of a new construction contract between Alto Maipo and Strabag SpA (hereinafter “Strabag”) called “Amended and Restated Lump Sum Fixed Price Tunnel Complex Construction Contract” (hereinafter the” Construction Contract “), which includes, among others, the following relevant aspects:
a. Strabag will carry out the works under the modality of lump sum fixed price, assuming the geological and construction risk of the Project;
b. Strabag took over the construction of the works initially assigned to Constructora Nuevo Maipo S.A., in the sector of El Yeso and Volcán;
c. The Construction Contract includes guaranteed completion dates, which are backed by financial guarantees and by Strabag’s parent company, estimating the start of the operations of both plants towards the end of 2020;
d. Strabag will grant financing for part of the cost associated with the new Construction Contract; and
e. The agreement includes an increase in Strabag’s stake in Alto Maipo’s ownership, in the event of the timely completion of certain milestones in the construction of the Project.
2. The signing of the new Construction Contract with Strabag, in the terms outlined above, required the preparation of a new budget for the Project, which now totals 3,048 million dollars, and an additional 392 million dollars that will be paid to Strabag only after the completion of the total construction of the Project, over a 20-year term. This budget has been approved by the institutions that finance it, including the following terms, among others:
a. An additional capital contribution by AES Gener to the Project, of 200 million dollars will be contributed during construction in the same proportion as the lenders disburse their contributions, and up to 200 million in funds that will be provided once the lenders have finished disbursing all the committed debt and to the extent that the funds are required for construction.
b. The lenders have agreed to grant the rest of the already committed financing, up to a total amount of 688 million dollars, and to capitalize interests during the construction, which implies an additional commitment of approximately 135 million dollars.
c. The lenders have agreed to various modifications to the financing contracts of the Project and the financing commitments assumed by each of them.
d. Strabag has agreed to provide financing to the Project, by allowing the 392 million to be repaid over a 20-year period, starting from the end of construction of the Project. Strabag may increase, under certain conditions, its equity participation in Alto Maipo SpA.
Today’s financial restructuring agreement will allow to fully cover the estimated costs of the Project and continue with the development and construction of the Project, which to date is 64% complete. The construction of the Project has never stopped, and currently, more than 4,700 workers work there.