as
The President of AES, Paul
Hanrahan, the president of PDVSA, Rafael Ramirez, and the Vice-President of
Venezuela, Jorge Rodriguez, presented the agreement to the public
yesterday.
Rodriguez praised the
agreement by saying, “With [the purchase of] Electricidad de Caracas [EDC] we
have exercised sovereignty – the rescue of strategic enterprises of the country,
in the areas of electricity, petroleum, and
telecommunications.”
Rodriguez referred to the
nationalization process as the “Cha-AES” method, in allusion to the government’s
effort to find amicable agreements between the Chavez government and private
owners. The term was first coined in a deal reached between President Chavez and
the land owner Carlos Azpurúa, in negotiations to turn over land as part of the
government’s land reform, when the process was referred to as the “Ch-Az”
method.
“To the sharks and
bloodsuckers that tried to fish in turbulent waters we showed that the
government is respectful of its word,” added Rodriguez.
Prior to this negotiation
opposition leaders had speculated that Chavez would try to expropriate companies
he had said his government would nationalize, which would have violated
Venezuela’s law on nationalizations, which states that companies must receive
fair compensation in any nationalization.
AES President Hanrahan
appeared to be satisfied with the agreement and said, "I think this deal is a
fair one,” adding, “We have been in the country for six years, when we made our
purchase [of EDC] at the time for 1.6 billion. We have had a good experience in
PDVSA President Ramirez also
expressed satisfaction with the negotiation, saying that they were “realized in
a very short amount of time and attended to the President’s orientation with
respect to our strategic and national interest in having control over the entire
electrical sector.”
Ramirez assured that the
remaining shares, which are mostly held by small investors, including the
company’s workers would remain in private hands. "We are preserving the interest
of the minority shareholders," said Ramirez.
Vice-President Rodriguez also
said that this agreement was the first in a series of agreements yet to come
that involve the nationalization of strategic sectors. Chavez had promised to
“rescue” strategic enterprises, “controlling electrical, [Orinoco Oil] Belt, and
telecommunications companies. In the coming days we will make successive
announcements about these transactions,” said Rodriguez.
The
Investors pleased with
outcome of negotiations
According to the AP, Luis
Gustavo Richard, a financial analyst with local brokerage InterAcciones Casa de
Bolsa CA. said, that the deal "turns out very well for the American investors."
Even though AES purchased the company for $1.6 billion and is selling it now for
$739 million, it made a handsome profit of $1 billion in the six years it owned
the company, said Richard. AES shares rose 0.63% on the
The final sale price was
slightly above EDC’s average trading price of the past few months, before it had
dropped significantly when Chavez announced his government’s intent to
nationalize the company. PDVSA agreed to purchase EDC at $0.27 per share, which
is $0.01 above the company’s closing price on Thursday.
Shares of the
telecommunications company CANTV, which Chavez had said would also be
nationalized, closed 1.6% higher in
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