SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
[ ] Confidential For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
THE AES CORPORATION
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(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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PRELIMINARY PROXY STATEMENT
CONSENT SOLICITATION STATEMENT
THE AES CORPORATION
Solicitations of Consents Relating to Each
Series of its Debt Securities Listed Below
Consent Fee
Principal per $1,000
Amount ISIN Principal
Debt Securities Outstanding* CUSIP Number Number Amount**
--------------- ----------- ------------ ------ --------
8.00% Senior Notes, Series A, Due 2008 $199,022,000 00130HAP0 US00130HAP01 $1.25
8.375% Senior Notes, Series F, Due 2011 (pound)135,000,000 -- XS0125168780 $2.00
4.50% Convertible Junior Subordinated Debentures Due 2005 $149,449,000 00130HAN5 US00130HAN5 $1.25
The AES Corporation ("AES") hereby solicits the consents of the Holders (as
defined herein) of the Debt Securities referenced above (collectively, the "Debt
Securities") to the amendment (the "Proposed Amendment") to the indentures
governing the Debt Securities as described herein.
AES's obligation to accept consents and to pay a consent fee to consenting
Holders is conditioned on, among other things, there being validly delivered and
unrevoked consents to the Proposed Amendment from the holders of not less than
(i) a majority in aggregate principal amount of the 8.00% Senior Notes, Series
A, Due 2008 (the "8.00% Senior Notes") and (ii) a majority in aggregate
principal amount of the 4.50% Convertible Junior Subordinated Debentures Due
2005 (the "Convertible Junior Subordinated Debentures") (collectively, the
"Requisite Consents"). AES will, as promptly as practicable after its acceptance
of the consents, pay the fee set forth above to the Holders of the Debt
Securities that have delivered valid and unrevoked consents on or prior to the
Expiration Time (as defined herein).
Pursuant to a separate consent solicitation (the "Other Consent Solicitation"),
AES is seeking the consent of the holders of its 8.75% Senior Notes, Series G,
Due 2008, 9.50% Senior Notes, Series B, Due 2009, 9.375% Senior Notes, Series C,
Due 2010, 8.875% Senior Notes, Series E, Due 2011 and 7.375% Remarketable or
Redeemable Securities Due 2013 (collectively, together with the 8.00% Senior
Notes and 8.375% Senior Notes, Series F, Due 2011 (the "8.375% Senior Notes"),
the "Senior Debt Securities"), 8.375% Senior Subordinated Notes Due 2007 (the
"8.375% Senior Subordinated Notes"), 10.25% Senior Subordinated Notes Due 2006
(the "10.25% Senior Subordinated Notes"), 8.50% Senior Subordinated Notes Due
2007 (the "8.50% Senior Subordinated Notes") and 8.875% Senior Subordinated
Notes Due 2027 (the "8.875% Senior Subordinated Notes" and together with the
8.375% Senior Subordinated Notes, the 10.25% Senior Subordinated Notes and the
8.50% Senior Subordinated Notes, the "Senior Subordinated Notes") to certain
proposed amendments. Our obligation to accept any consents validly tendered in
the Solicitations and not revoked is conditioned on our receipt of the requisite
consents in the Other Consent Solicitation (the "Other Requisite Consents")
which, as defined in the consent solicitation statement for the Other Consent
Solicitation, means validly delivered and unrevoked consents to (a) the Material
Subsidiary Amendment (as defined herein) to the Senior Indenture (as defined
herein) and the indentures governing the Senior Subordinated Notes (the "Senior
Subordinated Indentures") from the holders of not less than (i) a majority in
aggregate principal amount of the Senior Debt Securities (voting as a class)
(pursuant to the Other Consent Solicitation and the Solicitations), (ii) a
majority in aggregate principal amount of the 8.375% Senior Subordinated Notes,
(iii) a majority in aggregate principal amount of the 10.25% Senior Subordinated
Notes, and (iv) a majority in aggregate principal amount of the 8.50% Senior
Subordinated Notes and 8.875% Senior Subordinated Notes (voting as a class), and
(b) certain proposed amendments to the cross-acceleration and judgment default
provisions contained in the Senior Subordinated Indentures which would conform
these provisions to the comparable provisions in the Senior Indenture from the
holders of not less than (i) a majority in aggregate principal amount of the
8.375% Senior Subordinated Notes, (ii) a majority in aggregate principal amount
of the 10.25% Senior Subordinated Notes, and (iii) a majority in aggregate
principal amount of the 8.50% Senior Subordinated Notes and 8.875% Senior
Subordinated Notes (voting as a class).
Holders are requested to read and carefully consider the information contained
herein and to give their consent to the Proposed Amendment by properly
completing and executing the accompanying Consent Form in accordance with the
instructions set forth herein and therein.
None of AES, the Tabulation and Information Agents or the Solicitation Agent
makes any recommendation as to whether or not Holders of the Debt Securities
should consent to the Proposed Amendment.
EACH SOLICITATION EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 2003, UNLESS
OTHERWISE EXTENDED. CONSENTS MAY BE REVOKED ON THE TERMS AND CONDITIONS SET
FORTH HEREIN. SEE "THE CONSENT SOLICITATION--REVOCATION OF CONSENTS."
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The Solicitation Agent for the Solicitations is:
Salomon Smith Barney
March [ ], 2003
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* Excluding any Debt Securities held by AES or its affiliates.
** The 8.375% Senior Notes are denominated in pounds sterling therefore the
consent fee for the 8.375% Senior Notes is per (pound)1,000. The consent fee for
the 8.375% Senior Notes has been computed at a rate of 0.125% per (pound)1,000
and converted to U.S. dollars at an exchange rate of (pound)1.00 = $1.60. The
consent fee will not be adjusted for fluctuations in the exchange rate.
IMPORTANT
Only Holders (as defined below) who consent (each a "Consent") to the Proposed
Amendment (as defined below), by properly executing and delivering their Consent
Form on or prior to 5:00 p.m., New York City time, on [ ], 2003, unless
otherwise extended by AES (such time and date, as it may be extended by AES,
being called the "Expiration Time"), and do not revoke such Consent will be
entitled to receive a fee (the "Consent Fee") in the event all of the Conditions
(as defined below) are satisfied or waived; provided that AES will not be
required to pay a fee with respect to any series of Debt Securities if the
Solicitation with respect to such series of Debt Securities is terminated. All
other Holders will not be entitled to receive any Consent Fee, but will be bound
by the Proposed Amendment if such amendment becomes effective with respect to
the applicable series of Debt Securities. AES will accept the validly tendered
Consents and pay the Consent Fee as promptly as practicable after the
satisfaction (or waiver) of the Conditions.
Only Holders are eligible to Consent to the Proposed Amendment. Except as
provided in this paragraph, the term "Holder" means each person, other than AES
and its affiliates, shown on the records of the registrar or registrars for the
Debt Securities as a holder at 5:00 p.m., New York City time, on March 24, 2003
(the "Record Date"). For purposes of the Solicitations (as defined below), The
Depository Trust Company ("DTC") has authorized DTC participants
("Participants") set forth in the position listing of DTC as of the Record Date
to execute Consent Forms as if they were the Holders of the Debt Securities held
of record in the name of DTC or the name of its nominee. Accordingly, for
purposes of the Solicitations, the term "Holder" shall be deemed to include such
Participants. Any beneficial owner of the Debt Securities who is not a Holder of
such Debt Securities must arrange with the person who is the Holder or such
Holder's assignee or nominee to execute and deliver a Consent Form on behalf of
such beneficial owner. By executing the Consent Form, the Holder will be deemed
to waive any and all requirements under the Indentures regarding the
establishment of the Record Date, including any requirement that such date be
established on or by a specific date or during a specific period prior to the
Solicitations.
Holders who wish to Consent must deliver their properly completed and executed
Consent Form to the U.S. Tabulation and Information Agent (or, if preferred by
any Holder of the 8.375% Senior Notes, the Luxembourg Tabulation and Information
Agent) at the address set forth on the back cover page of this Consent
Solicitation Statement and in the Consent Form in accordance with the
instructions set forth herein and therein. Consents should not be delivered to
AES, the Trustee (as defined below) or the Solicitation Agent. However, AES
reserves the right to accept any Consent received by AES, the Trustee or the
Solicitation Agent. Under no circumstances should any person tender or deliver
Debt Securities to AES, the Trustee, the Solicitation Agent or the Tabulation
and Information Agents at any time.
In this Consent Solicitation Statement:
o the term "Conditions" means the conditions described herein on which
AES is obligated to accept the Consents and to pay the Consent Fee for
Consents validly delivered and not revoked;
o the term "Indentures" means the (i) Senior Indenture and (ii) the
Junior Subordinated Indenture;
o the term "Junior Subordinated Indenture" means the Junior Subordinated
Indenture dated as of August 10, 1998 among AES and Bank One, National
Association (formerly known as The First National Bank of Chicago), as
trustee, pursuant to which the Convertible Junior Subordinated
Debentures were issued and any supplemental indentures thereto;
o the term "Luxembourg Tabulation and Information Agent means Deutsche
Bank Luxembourg SA;
o the term "Proposed Amendment" means the Material Subsidiary Amendment
as more fully described in this Consent Solicitation Statement.
o the term "Senior Indenture" means the Senior Indenture dated as of
December 8, 1998 among AES and Bank One, National Association
(formerly known as The First National Bank of Chicago) ("Bank One"),
as trustee, pursuant to which the Senior Debt Securities were issued
and any supplemental indentures thereto;
o the term "Solicitation" means the solicitation of Consents of the
Holders of any series of Debt Securities and the term "Solicitations"
means all of the Solicitations;
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o the term "Solicitation Agent" means Salomon Smith Barney Inc.;
o the term "Tabulation and Information Agents" means the U.S. Tabulation
and Information Agent and the Luxembourg Tabulation and Information
Agent.
o the term "U.S. Tabulation and Information Agent" means Mellon Investor
Services LLC.; and
o the term "Trustee" means Wells Fargo Bank Minnesota, National
Association (the assignee of Bank One's rights and obligations as
Trustee under the Senior Indenture and the Junior Subordinated
Indenture).
For any series of Debt Securities, any terms used in this document that are not
otherwise defined herein have the meanings set forth in the Indenture governing
such series of Debt Securities.
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TABLE OF CONTENTS
Page
SUMMARY OF THE CONSENT SOLICITATIONS...........................................5
PURPOSE AND EFFECT OF THE CONSENT SOLICITATIONS................................8
PROPOSED AMENDMENT AND REQUISITE CONSENTS......................................9
THE CONSENT SOLICITATIONS.....................................................11
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES..................................16
WHERE YOU CAN FIND MORE INFORMATION...........................................17
FORWARD-LOOKING STATEMENTS....................................................17
MISCELLANEOUS.................................................................18
INCORPORATION OF DOCUMENTS BY REFERENCE.......................................18
* * *
No person has been authorized to give any information or make any
representations other than those contained or incorporated by reference herein
or in the accompanying Consent Form and other materials, and, if given or made,
such information or representations must not be relied upon as having been
authorized by AES, the Trustee, the Solicitation Agent, the Tabulation and
Information Agents or any other person. The statements made in this Consent
Solicitation Statement are made as of the date on the cover page and the
statements incorporated by reference are made as of the date of the document
incorporated by reference. The delivery of this Consent Solicitation Statement
and the accompanying materials shall not, under any circumstances, create any
implication that the information contained herein or incorporated by reference
is correct as of a later date.
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SUMMARY OF THE CONSENT SOLICITATIONS
This Consent Solicitation Statement and the related Consent Form contain
important information which should be read carefully before any decision is made
with respect to the Solicitations.
The Debt Securities................... 8.00% Senior Notes, Series A, Due 2008
8.375% Senior Notes, Series F, Due 2011
4.50% Convertible Junior Subordinated
Debentures Due 2005
The Solicitations..................... The purpose of the Solicitations is to
obtain the consent of the Holders to
change the definition of "Material
Subsidiary" contained in each Indenture
(the "Material Subsidiary Amendment") so
that the definition would be consistent
with the definition of "Material
Subsidiary" in the Indenture (the
"Senior Secured Indenture") dated
December 13, 2002 between AES and Wells
Fargo Bank Minnesota, National
Association, which governs AES's 10%
Senior Secured Notes Due 2005 (the
"Senior Secured Notes"). These changes
will give AES more flexibility to
optimally resolve the liquidity issues
facing its subsidiaries AES Drax Power
Limited ("Drax") and Eletropaulo
Metropolitana ("Eletropaulo") and
certain related subsidiaries.
The Proposed Amendment will not alter
the interest rate or maturity date of
the Debt Securities, AES's obligation to
make principal and interest payments on
the Debt Securities nor, except as
described in "Purpose and Effect of the
Consent Solicitations" and "The Proposed
Amendment and Requisite Consents," the
substantive effect of any other covenant
or provision designed to afford
protection to the holders of the Debt
Securities.
The Requisite Consents................ AES's obligation to accept Consents and
to pay a Consent Fee to consenting
Holders is conditioned on, among other
things, there being validly delivered
and unrevoked consents to (i) the
Proposed Amendment from the Holders of
not less than a majority in aggregate
principal amount of the 8.00% Senior
Notes and (ii) a majority in aggregate
principal amount of the Convertible
Junior Subordinated Debentures.
The Expiration Time................... The Solicitations will expire at 5:00
P.M., New York City time, on [ ], 2003
unless extended.
Consent Fee (per $1,000
principal amount unless
otherwise noted) 8.00% Senior Notes, Series A, Due 2008 $1.25
8.375% Senior Notes, Series F, Due 2011 $2.00*
4.50% Convertible Junior Subordinated Debentures $1.25
----------------------
* The 8.375% Senior Notes are
denominated in pounds sterling therefore
the consent fee for the 8.375% Senior
Notes is per (pound)1,000. The consent
fee for the 8.375% Senior Notes has been
computed at a rate of 0.125% per
(pound)1,000 and converted to U.S.
dollars at an exchange rate of
(pound)1.00 = $1.60. The consent fee
will not be adjusted for fluctuations in
the exchange rate.
Record Date........................... March 24, 2003
Conditions............................ AES's obligation to accept the Consents
and to pay the Consent Fee for Consents
validly delivered and not revoked prior
to the Expiration Time in any
Solicitation is conditioned on
o there being validly delivered and
unrevoked consents to the Proposed
Amendment from Holders of not less
than (i) a majority in aggregate
principal amount of the 8.00%
Senior Notes and (ii) a
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majority in aggregate principal
amount of the Convertible Junior
Subordinated Debentures;
o the Other Requisite Consents being
validly delivered and not revoked;
o our completion of the Other Consent
Solicitation;
o the prior or concurrent execution
and delivery by AES and the Trustee
of a supplemental indenture to each
Indenture (the "Supplemental
Indentures"), providing for the
Proposed Amendment;
o the absence of any law or
regulation which would, and the
absence of any pending or
threatened injunction or other
proceeding which (if adversely
determined) would, make unlawful or
invalid or enjoin the
implementation of the Proposed
Amendment or the payment of the
Consent Fee, or that would question
the legality or validity thereof;
and
o that (i) no change (or development
involving a prospective change)
shall have occurred or shall be
threatened in the business,
properties, assets, liabilities,
financial condition, operations,
results of operations or prospects
of AES, and (ii) no change (or
development involving a prospective
change) shall have occurred in
financial markets generally or
affecting the equity or debt
securities of AES that, in the
reasonable judgment of AES in the
case of either (i) or (ii) above,
is or may be adverse to AES or may
have a material adverse effect upon
the contemplated benefits to AES of
the Solicitations.
The foregoing conditions are for the
sole benefit of AES and AES may, in its
sole discretion, waive any of the
Conditions, in whole or in part, at any
time and from time to time or otherwise
amend the Solicitations at any time. No
Consent Fee will be paid with respect to
any series of Debt Securities if (i) the
Solicitation with respect to such series
is terminated or (ii) any of the
Conditions are not satisfied (or waived)
for any reason.
How to Deliver Consents .............. See "The Consent Solicitations--
Procedures for Consenting." For further
information, please contact the U.S.
Tabulation and Information Agent or
consult your broker, dealer, commercial
bank or trust company for assistance.
Holders of the 8.375% Senior Notes may
also contact the Luxembourg Tabulation
and Information Agent for assistance.
Revocation of Consents................ Consents may be revoked at any time
prior to the Expiration Time by
delivering a written notice of
revocation to the U.S. Tabulation and
Information Agent (or the Luxembourg
Tabulation and Information Agent in the
case of Holders of the 8.375% Senior
Notes that delivered their prior Consent
to the Luxembourg Tabulation and
Information Agent) at the applicable
address shown on the back cover of this
Consent Solicitation Statement.
Assistance and Information............ Questions concerning the terms of the
Solicitations and requests for
additional copies of this Consent
Solicitation Statement and the Consent
Form should be directed to the
Solicitation Agent at its address and
telephone number set forth on the back
cover of this Consent Solicitation
Statement. Requests for copies of the
Indentures and the form of each
Supplemental Indenture may be directed
to the U.S.
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Tabulation and Information Agent at the
address and telephone number set forth
on the back cover of this Consent
Solicitation Statement. Holders of the
8.375% Senior Notes may also contact the
Luxembourg Tabulation and Information
Agent, at the applicable address and
telephone number set forth on the back
cover of this Consent Solicitation
Statement for copies of the Senior
Indenture and the form of the applicable
Supplemental Indenture. Beneficial
owners may also contact their brokers,
dealers, commercial banks or trust
companies for assistance concerning the
Solicitations.
Certain Federal Income
Tax Consequences...................... For a summary of certain U.S. Federal
income tax consequences to the Holders
in connection with the Consents and the
Consent Fee, see "Certain Federal Income
Tax Consequences". Non-U.S. Holders are
urged to consult their own tax advisors
regarding the application of United
States federal income tax withholding,
including eligibility for a withholding
tax exemption and refund procedures.
Consequences to Non-Consenting
Holders............................... If the Requisite Consents are obtained
and the other Conditions are satisfied
(or waived) and the applicable
Supplemental Indenture becomes
operative, all Holders of the applicable
series of Debt Securities will be bound
by the Proposed Amendment whether or not
they have provided Consents.
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PURPOSE AND EFFECT OF THE CONSENT SOLICITATIONS
The Solicitations. The purpose of the Solicitations is to obtain the
Requisite Consent of the Holders of the Debt Securities to the Proposed
Amendment.
AES is seeking Consents to the Proposed Amendment to the definition of
"Material Subsidiary" contained in the Indentures from the Holders of the Debt
Securities to give AES more flexibility to optimally resolve the liquidity
issues facing its subsidiaries, Drax and Eletropaulo and certain related
subsidiaries. The Indentures governing the Debt Securities currently define
"Material Subsidiary" by reference to the definition of "significant subsidiary"
contained in Article 1 of Regulation S-X of the Securities Act of 1933, as
amended. Each of Drax and Eletropaulo and certain related subsidiaries
constitutes a "Material Subsidiary" for purposes of the bankruptcy related event
of default contained in the Debt Securities as a result of the significant asset
impairment losses related to those entities recorded by AES in 2002. AES
believes this is inappropriate given that it has written off its investment in
Drax and has substantially written down its investment in Eletropaulo. In
addition, AES is prohibited from making any further investments in Drax or
Eletropaulo under AES's senior credit facilities.
Eletropaulo and its shareholders, AES Elpa and AES Transgas, are currently
in default (including a $330 million payment default by AES Transgas) under
certain of their existing debt instruments and are negotiating with their
lenders, including the Brazil National Bank for Economic and Social Development,
to restructure this indebtedness. Drax has been working cooperatively with its
lenders to address the liquidity needs of the project since the termination of
its long term electricity sales hedging agreement with certain TXU Europe
companies during the fourth quarter of 2002. Drax has entered into a standstill
agreement with its senior lenders effective through May 31, 2003 to provide Drax
time to restructure its business and its indebtedness after the termination of
the hedging arrangement.
While an event of default does not currently exist under any of the Debt
Securities and AES considers it unlikely that any of the specified bankruptcy
related events will occur, AES's flexibility in restructuring Drax and
Eletropaulo is limited by the inclusion of Drax and Eletropaulo as "Material
Subsidiaries" for purposes of the bankruptcy related event of default. While AES
has and is pursuing alternative strategies to restructure these subsidiaries,
AES believes that the additional flexibility of being able to actively consider
bankruptcy related strategies, even if not implemented, could significantly
enhance AES's ability to restructure these businesses. For the reasons set forth
above, AES believes that the definition of "Material Subsidiary" contained in
the Senior Secured Indenture is a more appropriate test and is requesting your
consent to conform the definition of "Material Subsidiary" in the Indentures to
the "Material Subsidiary" definition included in the Senior Secured Indenture.
The Other Consent Solicitation. While no event of default currently exists
under any of indentures governing AES's Senior Debt Securities or Senior
Subordinated Notes, AES is separately seeking consents from the holders of the
Senior Debt Securities other than the 8.00% Senior Notes and the 8.375% Senior
Notes and from the holders of the Senior Subordinated Notes, pursuant to the
Other Consent Solicitation, to (i) the Material Subsidiary Amendment and a
substantially similar amendment to the Senior Subordinated Indentures
respectively, and (ii) an amendment to each of the Senior Subordinated
Indentures which would change the cross-acceleration event of default provision
and eliminate the judgment event of default provision contained in the Senior
Subordinated Indentures so that the cross-acceleration event of default
provision in the Senior Subordinated Indentures would be consistent with the
cross-acceleration event of default provision contained in the Senior Indenture
and, consistent with the Senior Indenture, the Senior Subordinated Indentures
would not have a judgment default provision.
AES's acceptance of the consents received pursuant to the Other Consent
Solicitation is conditioned on, among other things, AES's receipt of the
Requisite Consents pursuant to this Solicitation.
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PROPOSED AMENDMENT AND REQUISITE CONSENTS
The Material Subsidiary Amendment. The proposed Material Subsidiary
Amendment will replace:
(i) the following definition of "Material Subsidiary" contained in Section
1.1. of the Senior Indenture:
"Material Subsidiary" of a Person means, as of any date, any
Subsidiary that would constitute a "significant subsidiary" within the
meaning of Article 1 of Regulation S-X of the Securities Act of 1933, as
amended;
and (ii) the following definition of "Material Subsidiary" contained in Section
1.1 of the Junior Subordinated Indenture:
"Material Subsidiary" of a Person is defined to mean, as of any date,
any Subsidiary that would constitute a "significant subsidiary" within the
meaning of Article 1 of Regulation S-X of the Securities Act of 1933, as
amended;
with a new definition which conforms to the definition of "Material Subsidiary"
contained in the Senior Secured Indenture and reads in its entirety as follows:
"Material Subsidiary" of any Person means, as of any date, any
Subsidiary of which such Person's proportionate share of such Subsidiary's
total assets (after intercompany eliminations) exceeds 15 percent of the
total assets of such Person on a consolidated basis."
The proposed Material Subsidiary Amendment will not alter the interest rate
or maturity date of the Debt Securities, AES's obligation to make principal and
interest payments on the Debt Securities nor, except as described above and in
"Purpose and Effect of the Consent Solicitations," the substantive effect of any
other covenant or provision designed to afford protection to the holders of the
Debt Securities.
The Requisite Consents. The Indentures governing the Debt Securities
contain the following provisions regarding AES's and the Trustee's ability to
enter into supplemental indentures for the purpose of amending the Indentures:
o Section 9.2 of the Senior Indenture provides that the Trustee and AES
may enter into a supplemental indenture for the purpose of amending
provisions of such Indenture (excepting certain provisions not here
relevant) with the consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding securities of all series
affected by such amendment (all such series voting as a separate class).
However, as discussed in "The Consent Solicitations - Conditions to the
Consent Solicitations," our obligation to accept any valid and unrevoked
consents and pay the Consent Fee is subject to, among other things, our
receipt of valid and unrevoked Consents from a majority in aggregate
outstanding principal amount of the 8.00% Senior Notes.
o Section 9.2 of the Junior Subordinated Indenture provides that the
Trustee and AES may enter into a supplemental indenture for the purpose of
amending provisions of such Indenture (excepting certain provisions not
here relevant) with the consent of the Holders of a majority in aggregate
principal amount of the outstanding securities of all series affected by
such amendment (all such series voting as a separate class).
AES is soliciting the Consents to the Proposed Amendment from Holders of
not less than (i) a majority in aggregate principal amount of the 8.00% Senior
Notes and (ii) a majority in aggregate principal amount of the Convertible
Junior Subordinated Debentures. Pursuant to the Other Consent Solicitation, AES
is seeking, among other things, the consents of holders of the Senior Debt
Securities other than the 8.00% Senior Notes and the 8.375% Senior Notes to the
Material Subsidiary Amendment to the Senior Indenture. The Other Consent
Solicitation is conditioned on, among other things, AES's receipt, pursuant to
the Other Consent Solicitation and the Solicitations of valid and unrevoked
consents to the Material Subsidiary Amendment from the holders of not less than
a majority in aggregate principal amount of the Senior Debt Securities (voting
as a class).
9
The foregoing summary does not purport to be complete and is qualified in
its entirety by reference to the full and complete terms of the Indentures and
of the Proposed Amendment as set forth in each form of Supplemental Indenture,
each of which is incorporated herein by this reference. Copies of the Indentures
and each form of Supplemental Indenture are available from AES upon request in
the manner discussed under "Incorporation of Certain Documents By Reference."
10
THE CONSENT SOLICITATIONS
General
AES is soliciting Consents from the Holders of the Debt Securities to the
Proposed Amendment. Consents must be properly completed, duly executed and
delivered prior to the Expiration Time. Consents may only be revoked as
described below under "Revocation of Consents".
The Proposed Amendment will become effective with respect to the Debt
Securities only upon acceptance by AES of the Requisite Consents validly
tendered and not revoked. Such acceptance is also conditioned upon satisfaction
(or waiver) of all other Conditions, including (i) the Other Requisite Consents
being validly delivered and not revoked, (ii) our completion of the Other
Consent Solicitation, and (iii) the prior or concurrent execution and delivery
of the Supplemental Indentures by AES and the Trustee.
If the Consents are accepted by the Company and the Supplemental Indentures
become effective with respect to any series of Debt Securities, the Proposed
Amendment will be binding on all holders of Debt Securities of such series,
whether or not such holders have consented to the Proposed Amendment. As
promptly as practicable after the effectiveness of the Proposed Amendment, AES
will pay (directly or through an agent) to each Holder who has delivered a
properly executed and completed Consent Form to the U.S. Tabulation and
Information Agent (or, if preferred by any Holder of the 8.375% Senior Notes,
the Luxembourg Tabulation and Information Agent) on or prior to the Expiration
Time, which has not been subsequently revoked, the Consent Fee with respect to
the Debt Securities for which a Consent was effective; provided that AES will
not be obligated to pay a Consent Fee with respect to any series of Debt
Securities if the Solicitation with respect to such Series is terminated.
Failure to deliver a Consent Form will have the same effect as if a Holder had
chosen not to give its Consent with respect to the Proposed Amendment. AES will
issue a press release notifying Holders of Debt Securities of its receipt of the
Requisite Consents (assuming the Requisite Consents have been received) promptly
after the Expiration Time. No Consent will be deemed to have been accepted until
all of the Conditions have been satisfied (or waived).
The delivery of a Consent Form will not affect a Holder's right to sell or
transfer the Debt Securities. If a Holder delivers a Consent and subsequently
transfers its Debt Securities prior to the Expiration Time, the Consent will be
binding on all subsequent transferees of such securities, and any Consent Fee
payment with respect to such Debt Securities will be made to such Holder unless
the Consent with respect to such Debt Securities has been validly revoked at any
time prior to the Expiration Time.
Beneficial owners of the Debt Securities who wish to provide a Consent and
whose Debt Securities are held, as of the Record Date, in the name of a broker,
dealer, commercial bank, trust company or other nominee institution must contact
such nominee promptly and instruct such nominee, as the Holder of such Debt
Securities, to promptly execute and deliver a Consent Form on behalf of the
beneficial owner on or prior to the Expiration Time.
If the Proposed Amendment has not become effective on or before the date
which is six months after the Record Date, then no Consent shall be valid, and
AES shall not be obligated to pay any Consent Fee in respect of any such
Consent.
Any Solicitation may be terminated by AES, in its sole discretion, at any
time prior to the effectiveness of the Proposed Amendment. If any solicitation
is terminated, all Consents received with respect to such Solicitation shall be
voided and AES will not be obligated to pay any Consent Fee to any Holders with
respect to such Solicitation.
Consent Fee
Subject to the conditions set forth in this Consent Solicitation Statement,
the Consent Fee to be paid to Holders of each series of Debt Securities who
properly submit and do not revoke Consents that are accepted by AES, is set
forth below:
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Consent Fee
per $1,000
CUSIP ISIN Principal
Debt Securities Number Number Amount*
--------------- ------ ------ ------
8.00% Senior Notes, Series A, Due 2008 00130HAP0 US00130HAP01 $1.25
8.375% Senior Notes, Series F, Due 2011 -- XS0125168780 $2.00**
4.50% Convertible Junior Subordinated Debentures, Due 2005 00130HAN5 US00130HAN5 $1.25
----------------
* AES will not be obligated to pay a Consent Fee with respect to any series of
Debt Securities if the Solicitation with respect to such series of Debt
Securities is terminated.
** The 8.375% Senior Notes are denominated in pounds sterling therefore the
consent fee for the 8.375% Senior Notes is per (pound)1,000. The consent fee for
the 8.375% Senior Notes has been computed at a rate of 0.125% per (pound)1,000
and converted to U.S. dollars at an exchange rate of (pound)1.00 = $1.60. The
consent fee will not be adjusted for fluctuations in the exchange rate.
Record Date
The Record Date for the determination of Holders entitled to give Consents
pursuant to the Solicitations is 5:00 p.m., New York City time, on March 24,
2003. This Consent Solicitation Statement and the accompanying Consent Form are
being sent to all Holders as of the Record Date. AES reserves the right to
establish from time to time any new date as the Record Date with respect to any
Solicitation and, thereupon, any such new date will be deemed to be the "Record
Date" for purposes of such Solicitation. By executing the Consent Form, the
Holder will be deemed to waive any and all requirements under the Indentures
regarding the establishment of the Record Date, including any requirement that
such date be established on or by a specific date or during a specific period
prior to the Solicitations.
Conditions to the Consent Solicitations
The obligations of AES to accept any valid and unrevoked Consents and pay
the Consent Fee are subject to the following Conditions:
(1) the Requisite Consents being validly delivered and not revoked;
(2) the Other Requisite Consents being validly delivered and not revoked;
(3) our completion of the Other Consent Solicitation;
(4) the prior or concurrent execution and delivery by AES and the Trustee
of a Supplemental Indenture to each Indenture, providing for the Proposed
Amendment;
(5) the absence of any law or regulation which would, and the absence of
any pending or threatened injunction or action or other proceeding which (in the
case of any action or proceeding if adversely determined) would, make unlawful
or invalid or enjoin the implementation of the Proposed Amendment or the payment
of the Consent Fee, or that would question the legality or validity thereof; and
(6) that (i) no change (or development involving a prospective change)
shall have occurred or shall be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations or prospects
of AES, and (ii) no change (or development involving a prospective change) shall
have occurred in financial markets generally or affecting the equity or debt
securities of AES that, in the reasonable judgment of AES in the case of either
(i) or (ii) above, is or may be adverse to AES or has or may have a material
adverse effect upon the contemplated benefits to AES of the Solicitations.
The foregoing conditions are for the sole benefit of AES and AES may, in
its sole discretion, waive any of the Conditions, in whole or in part, at any
time and from time to time or otherwise amend any Solicitation at any time.
Further, if any of the Conditions are not satisfied or capable of satisfaction
prior to or concurrent with the Expiration Time, AES may, in its sole discretion
and without giving any notice, allow any Solicitation to lapse or extend the
solicitation period for any Solicitation and continue soliciting Consents with
respect thereto. No Consent Fee will be paid if any of the Conditions are not
satisfied (or waived) for any reason.
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Expiration Time; Extensions; Amendment; Termination; Waivers
The term "Expiration Time" means 5:00 p.m., New York City time, on [ ],
2003, unless AES, in its sole discretion, extends the period during which any
Solicitation is open, in which case the term "Expiration Time" means the latest
date and time to which such Solicitation is extended. To extend the Expiration
Time, AES will so notify the Tabulation and Information Agents in writing or
orally and will make a public announcement in the United States and in
Luxembourg thereof, each not later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Time. AES may extend
the Solicitations on a daily basis or for such specified period of time as it
determines in its sole discretion. Failure by any Holder or beneficial owner of
the Debt Securities to learn of such public announcement will not affect the
extension of the Solicitations.
Notwithstanding anything to the contrary set forth in this Consent
Solicitation Statement, AES reserves the right, in its sole discretion and
regardless of whether any of the Conditions described above under "--Conditions
to the Consent Solicitations" have been satisfied, subject to applicable law, at
any time prior to the effectiveness of the Proposed Amendment, to (1) terminate
any Solicitation for any reason, (2) waive any of the Conditions to any
Solicitation, (3) extend the Expiration Time of any Solicitation, (4) amend the
terms of any Solicitation or (5) modify the form or amount of the consideration
to be paid pursuant to any Solicitation; provided, however, that in no event
will AES reduce the amount of the Consent Fee without at least five business
days notice. In the event any Solicitation is abandoned or terminated prior to
the effectiveness of the Proposed Amendment, any Consents received pursuant to
that Solicitation will be voided and no Consent Fee will be paid with respect to
such Consents.
If a Solicitation is amended or modified, in whole or in part, in a manner
determined by AES to constitute a material change to the Holders of Debt
Securities, AES will promptly disclose such amendment or modification in a
manner reasonably calculated to inform Holders of such change. However, subject
to applicable law, the requirements of the New York Stock Exchange and the
Luxembourg Stock Exchange and the immediately preceding sentence and without
limiting the manner in which AES may choose to make such disclosure, AES shall
have no obligation to publish, advertise or otherwise communicate any such
disclosure other than by the timely issuance of a press release containing such
disclosure. In the event of a material amendment or modification to a
Solicitation, AES will extend such Solicitation for a period deemed by it to be
adequate to permit such Holders to deliver and/or revoke their Consents.
Procedures for Consenting
All Consent Forms that are properly executed and delivered to the U.S.
Tabulation and Information Agent (or, if preferred by any Holder of the 8.375%
Senior Notes, the Luxembourg Tabulation and Information Agent) prior to the
Expiration Time and not timely revoked will be given effect in accordance with
the specifications therein.
Holders who desire to act with respect to the Proposed Amendment should so
indicate by marking the appropriate box in, and signing and dating, the
accompanying Consent Form and delivering it to the U.S. Tabulation and
Information Agent (or, if preferred by any Holders of the 8.375% Senior Notes,
the Luxembourg Tabulation and Information Agent) at the address set forth in the
Consent Form, in accordance with the instructions contained herein and therein.
If neither of the boxes in the Consent Form is checked, but the Consent Form is
otherwise completed and signed, the Holder will be deemed to have consented to
the Proposed Amendment. Signatures may be required to be guaranteed in
accordance with paragraph 7 of the instructions in the Consent Form.
The Consent Form must be executed in exactly the same manner as the name of
the Holder appears on the Debt Securities. An authorized DTC Participant must
execute the Consent Form exactly as its name appears on DTC's position listing
as of the Record Date. If the Debt Securities are held of record by two or more
joint Holders, all such Holders must sign the Consent Form. If a signature is by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other Holder acting in a fiduciary or representative capacity,
such person should so indicate when signing and must submit proper evidence
satisfactory to AES of such person's authority to so act. If a Holder has Debt
Securities registered in different names, separate Consent Forms must be
executed covering each form of registration. If a Holder has more than one
series of Debt Securities, a separate Consent Form must be executed for each
series of Debt Securities. If a Consent Form is executed by a person other than
the Holder, then such person must have been authorized by proxy or in some other
manner acceptable to AES to execute the Consent Form with respect to the
applicable Debt Securities on behalf of the Holder. Any beneficial owner of the
Debt Securities who is not a Holder of record of such Debt Securities must
13
arrange with the person who is the Holder of record or such Holder's assignee or
nominee to execute and deliver a Consent Form on behalf of such beneficial
owner.
If a Consent relates to fewer than all the Debt Securities held of record
as of the Record Date by the Holder providing such Consent, such Holder must
indicate on the Consent Form the aggregate dollar amount (in integral multiples
of $1,000 for the 8.00% Senior Notes and the Convertible Junior Subordinated
Debentures and in integral multiples of (pound)1,000 for the 8.375% Senior
Notes) to which the Consent relates. Otherwise, the Consent will be deemed to
relate to all such Debt Securities. The Holder will receive the Consent Fee for
only that portion of such Debt Securities to which the Consent relates.
A Holder must complete, sign and date the Consent Form (or photocopy
thereof) for such Holder's Debt Securities, obtain a signature guarantee thereof
to the extent required by the terms thereof and deliver such Consent Form to the
U.S. Tabulation and Information Agent (or, if preferred by any Holder of the
8.375% Senior Notes, the Luxembourg Tabulation and Information Agent) by mail,
first-class postage prepaid, hand delivery, overnight courier or by facsimile
transmission (with an original to be delivered subsequently) at the address or
facsimile number set forth on the back cover page hereof. Delivery of Consent
Forms should be made sufficiently in advance of the Expiration Time to assure
that the Consent Form is received prior to the Expiration Time (and, in the case
of facsimile transmission, that the original Consent Form is received by the
U.S. Tabulation and Information Agent (or, with respect to any Holder of 8.375%
Notes that elects to deliver its Consent Form to the Luxembourg Tabulation and
Information Agent, the Luxembourg Tabulation and Information Agent) prior to
5:00 p.m., New York City time, on the third business day following the
Expiration Time). Under no circumstances should any person tender or deliver
Debt Securities to AES, the Trustee, the Solicitation Agent or the Tabulation
and Information Agent at any time. Holders of the 8.375% Senior Notes may
deliver their Consents to either the U.S. Tabulation and Information Agent or
the Luxembourg Tabulation Agent but not both. Duplicate Consents will not be
accepted by the Tabulation Agents.
AES reserves the right to receive Consent Forms by any other reasonable
means or in any form that reasonably evidences the giving of Consent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and revocations of Consents will be resolved by AES whose
determinations will be binding. AES reserves the absolute right to reject any or
all Consents and revocations that are not in proper form or the acceptance of
which could, in the opinion of AES's counsel, be unlawful. AES also reserves the
right to waive any irregularities in connection with deliveries, which AES may
require to be cured within such time as AES determines. None of AES, the
Solicitation Agent, the Tabulation and Information Agents, the Trustee or any
other person shall have any duty to give notification of any such irregularities
or waiver, nor shall any of them incur any liability for failure to give such
notification. Deliveries of Consent Forms or notices of revocation will not be
deemed to have been made until such irregularities have been cured or waived.
AES's interpretation of the terms and conditions of the Solicitation (including
this Consent Solicitation Statement and the accompanying Consent Form and the
instructions hereto and thereto) will be final and binding on all parties.
Revocation of Consents
All properly completed and executed Consent Forms received prior to the
Expiration Time will be counted, notwithstanding any transfer of the Debt
Securities to which such Consent Form relates, unless the applicable Tabulation
and Information Agent receives from the Holder who submitted the Consent Form
(or a subsequent holder which has received a proxy from the relevant Holder) a
written notice of revocation or a changed Consent Form bearing a date later than
the date of the prior Consent Form prior to the Expiration Time. A Consent to
the Proposed Amendment by a Holder of Debt Securities will bind the Holder and
every subsequent holder of such Debt Securities or portion of such Debt
Securities, even if notation of the Consent is not made on such Debt Securities.
A transfer of the Debt Securities after the Record Date must be accompanied
by a duly executed proxy from the relevant Holder if the subsequent transferee
is to have revocation rights with respect to the Consent to the Proposed
Amendment.
Any Holder of the Debt Securities as to which a Consent has been given may
revoke such Consent as to such Debt Securities or any portion of such Debt
Securities (in integral multiples of $1,000 for the 8.00% Senior Notes and the
Convertible Junior Subordinated Debentures and in integral multiples of
(pound)1,000 for the 8.375% Senior
14
Notes) by delivering a written notice of revocation or a changed Consent Form
bearing a date later than the date of the prior Consent Form with the Tabulation
and Information Agent to whom the prior Consent Form was delivered at any time
prior to the Expiration Time.
To be effective, a notice of revocation must be in writing, must contain
the name of the Holder, and the aggregate principal amount of the Debt
Securities to which it relates and must be (a) signed in the same manner as the
original Consent Form or (b) signed by the transferee of the relevant Debt
Securities and accompanied by a duly executed proxy or other authorization from
the relevant Holder (in form satisfactory to AES). All revocations of Consents
must be sent to the Tabulation and Information Agent to whom the prior Consent
Form was delivered at its address set forth in the Consent Form. If the Holder
wishes to revoke Consents given with respect to more than one series of Debt
Securities, a separate notice of revocation must be completed for each series of
Debt Securities.
To be effective, the revocation must be executed by the Holder of such Debt
Securities in the same manner as the name of such Holder appears on the books of
the register maintained by the Trustee or as set forth in DTC's position listing
without alteration, enlargement or any change whatsoever. If a revocation is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person must indicate such fact when signing and must submit with
the revocation appropriate evidence of authority to execute the revocation. A
revocation of the Consent will be effective only as to the Debt Securities
listed on the revocation and only if such revocation complies with the
provisions of this Consent Solicitation Statement and the Consent Form. Only a
Holder of the Debt Securities is entitled to revoke a Consent previously given.
A beneficial owner of the Debt Securities must arrange with the Holder to
execute and deliver on its behalf a revocation of any Consent already given with
respect to such Debt Securities. A purported notice of revocation that is not
received by the Tabulation and Information Agent to whom the prior Consent Form
was sent in a timely fashion and accepted by AES as a valid revocation will not
be effective to revoke a Consent previously given.
A revocation of a Consent may only be rescinded by the delivery of a
written notice of revocation to the Tabulation and Information Agent to whom the
prior revocation was delivered or the execution and delivery of a new Consent
Form. A Holder who has delivered a revocation may thereafter deliver a new
Consent Form by following one of the described procedures at any time prior to
the Expiration Time.
Prior to the Expiration Time, AES intends to consult with the Tabulation
and Information Agents to determine whether the Tabulation and Information
Agents have received any revocations of Consents. AES reserves the right to
contest the validity of any such revocations.
Solicitation Agent
AES has retained Salomon Smith Barney Inc. as Solicitation Agent with
respect to the Solicitations. The Solicitation Agent will solicit Consents and
will receive a customary fee for such services and reimbursement for reasonable
out-of-pocket expenses, including the reasonable fees and expenses of its
counsel, incurred in connection with such services. AES has agreed to indemnify
the Solicitation Agent against certain liabilities and expenses, including
liabilities under securities laws, in connection with the Solicitations.
Salomon Smith Barney and its affiliates have from time to time provided
certain commercial banking, financial advisory and investment banking services
to AES and its affiliates for which they have received customary fees. In the
ordinary course of their businesses, Salomon Smith Barney or its affiliates may
at any time hold long or short positions, and may trade for their own accounts
or the accounts of customers, in the debt or equity securities of AES, including
any of the Debt Securities. Citibank, N.A., an affiliate of Salomon Smith
Barney, is administrative agent and a lender under AES's senior secured credit
facilities. Salomon Smith Barney and its affiliates may from time to time engage
in future transactions with AES and its affiliates and provide services to AES
and its affiliates in the ordinary course of their respective businesses.
Questions with respect to the terms of the Solicitations or requests for
additional copies of this Consent Solicitation Statement, the accompanying
Consent Form and other related documents should be directed to the Solicitation
Agent in accordance with its contact information set forth on the back cover of
this Consent Solicitation Statement.
15
Tabulation and Information Agents
Mellon Investor Services LLC has been retained by AES to act as U.S.
Tabulation and Information Agent with respect to the Solicitations. For the
services of the U.S. Tabulation and Information Agent, AES has agreed to pay
reasonable and customary fees and to reimburse the U.S. Tabulation and
Information Agent for its reasonable out-of-pocket expenses in connection with
such services.
Deutsche Bank has been retained by AES to act as Luxembourg Tabulation and
Information Agent with respect to the Solicitation made to Holders of the 8.375%
Senior Notes only. For the services of the Luxembourg Tabulation and Information
Agent, AES has agreed to pay reasonable and customary fees and to reimburse the
Luxembourg Tabulation and Information Agent for its reasonable out-of-pocket
expenses in connection with such services.
Requests for assistance in completing and delivering the Consent Form
should be directed to the U.S. Tabulation and Information Agent at its address
and telephone number set forth on the back cover page hereof. Holders of the
8.375% Senior Notes may also utilize the services of the Luxembourg Tabulation
and Information Agent with respect to the Solicitations, and Consents delivered
by Holders of the 8.375% Senior Notes may be sent to either the U.S. Tabulation
Information Agent or the Luxembourg Tabulation and Information Agent but not
both. Duplicate Consents will not be accepted. Holders of the 8.375% Senior
Notes must deliver any notice of Revocation of Consent to the same Tabulation
Agent to which the prior Consent Form was delivered Holders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Solicitations. The executed Consent Form and any other
documents required by the Consent Form should be sent to the U.S. Tabulation and
Information Agent (or the Luxembourg Tabulation and Information Agent if so
selected by Holders of the 8.375% Senior Notes) at the address set forth in the
Consent Form, and not to AES, the Trustee or the Solicitation Agent.
Fees and Expenses
AES will bear the costs of the Solicitations and will reimburse the Trustee
for expenses that the Trustee will incur in connection with the Solicitations.
AES will also reimburse banks, trust companies, securities dealers, nominees,
custodians and fiduciaries for their reasonable expenses in forwarding this
Consent Solicitation Statement, the accompanying Consent Form and other
materials to beneficial owners of the Debt Securities.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
In General
The following summary describes certain United States federal income tax
consequences relating to the Solicitations that may be relevant to a Holder or a
beneficial owner of the Debt Securities that is a citizen or resident of the
United States or a domestic corporation or otherwise subject to United States
federal income tax on a net income basis in respect of the Debt Securities (a
"U.S. Holder"). The summary is based on the Internal Revenue Code of 1986 (the
"Code") and existing final, temporary and proposed Treasury Regulations, Revenue
Rulings and judicial decisions, all of which are subject to prospective and
retroactive changes. This summary does not attempt to address the U.S. federal
income tax consequences of all categories of Holders of Debt Securities, some of
which may be subject to special rules (e.g. life insurance companies, banks,
dealers in securities or currencies, tax-exempt entities and foreign taxpayers).
AES will not seek a ruling from the Internal Revenue Service (the "IRS") with
regard to the United States federal income tax treatment of the Solicitations
and, therefore, there can be no assurance that the IRS will agree with the
conclusions set forth below, or that if the IRS were to challenge such
conclusions such challenge would not be sustained by a court. Accordingly, each
Holder and beneficial owner of the Debt Securities should consult its own tax
advisor with regard to the Solicitations and the application of United States
federal income tax laws, as well as the laws of any state, local or foreign
taxing jurisdictions, to its particular situation.
Characterization of Proposed Amendment
The modification of a debt instrument creates a deemed exchange upon which
gain or loss is realized (a "Deemed Exchange") if the modified debt instrument
differs materially either in kind or in extent from the original debt
instrument. A modification of a debt instrument that is not a "significant
modification" under the applicable
16
Treasury Regulation does not create a Deemed Exchange. The effectiveness of the
Proposed Amendment should not constitute a "significant modification" or cause a
Deemed Exchange because the Consent Fee will not alter the yield on the Debt
Securities (or will not alter the yield by more than a de minimis amount).
Accordingly, a U.S. Holder should not recognize any income, gain or loss with
respect to the Debt Securities as a result of the modification of the Indentures
pursuant to the Proposed Amendment (except to the extent of any Consent Fee
received as described below), regardless of whether a U.S. Holder consents to
the Proposed Amendment, and should have the same adjusted tax basis and holding
period in the Debt Securities after the adoption of the Proposed Amendment that
such U.S. Holder had in the Debt Securities immediately before such adoption.
Consent Fee
The proper treatment of the Consent Fee is unclear. However, AES intends to
take the position that the payments will represent ordinary income to Holders in
the full amount of the payments, without reduction by any portion of a holder's
basis in the Debt Securities. Each Holder or beneficial owner should consult its
own tax advisor as to possible alternative treatments of the Consent Fee.
Backup Withholding
A U.S. Holder may be subject to backup withholding at a rate of 30% on
Consent Fees unless such U.S. Holder (i) is a corporation or comes within
certain other exempt categories and demonstrates this fact, or (ii) provides a
correct taxpayer identification number, certifies as to no loss of exemption
from backup withholding and otherwise complies with applicable requirements of
the backup withholding rules. The amount of any backup withholding from a
Consent Fee will be allowed as a credit against such U.S. Holder's federal
income tax liability and may entitle such U.S. Holder to a refund, provided that
the required information is furnished to the IRS.
Foreign Holders
Although, as noted above, the proper treatment of the Consent Fee is
unclear, the Company intends to take the position that the Consent Fee
represents ordinary income and intends to withhold United States federal income
tax at a 30% rate on payments of the Consent Fee to beneficial owners of the
Debt Securities who are not "United States persons" (within the meaning of Code
Section 7701(a)(30)). Thus, non-U.S. Holders are urged to consult their own tax
advisors regarding the application of United States federal income tax
withholding, including eligibility for a withholding tax exemption and refund
procedures.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document that we file at the public reference rooms of the Securities and
Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain
information on the operation of the public reference rooms by calling the
Securities and Exchange Commission at 1-800-SEC-0330. The Securities and
Exchange Commission also maintains an Internet site at http://www.sec.gov, from
which you can access our filings.
Any statement contained in this Consent Solicitation Statement concerning
the provisions of any document filed with the Securities and Exchange Commission
is not necessarily complete, and reference is made to the copy of the document
filed.
FORWARD-LOOKING STATEMENTS
This Consent Solicitation Statement includes forward-looking statements. We
have based these forward-looking statements on our current expectations and
projections about future events. These forward-looking statements are subject to
risks, uncertainties, and assumptions related to AES, including those set forth
under the caption "Cautionary Statements and Risk Factors" in our annual report
on Form 10-K, which is incorporated by reference in this Consent Solicitation
Statement.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this Consent Solicitation Statement might not occur.
17
MISCELLANEOUS
No person has been authorized to give any information or make any
representations other than those contained or incorporated by reference herein
or in the accompanying Consent Form and other materials, and, if given or made,
such information or representations must not be relied upon as having been
authorized by AES, the Trustee, the Solicitation Agent, the Tabulation and
Information Agents or any other person. The statements made in this Consent
Solicitation Statement are made as of the date on the cover page and the
statements incorporated by reference are made as of the date of the document
incorporated by reference. The delivery of this Consent Solicitation Statement
and the accompanying materials shall not, under any circumstances, create any
implication that the information contained herein or incorporated by reference
is correct as of a later date.
Recipients of this Consent Solicitation Statement and the accompanying
materials should not construe the contents hereof or thereof as legal, business
or tax advice. Each recipient should consult its own attorney, business advisor
and tax advisor as to legal, business, tax and related matters concerning the
Solicitations.
The Solicitations are not being made to, and Consent Forms will not be
accepted from or on behalf of, Holders in any jurisdiction in which the making
of the Solicitations or the acceptance thereof would not be in compliance with
the laws of such jurisdiction. However, AES may in its discretion take such
action as it may deem necessary to make the Solicitations in any such
jurisdiction and to extend the Solicitations to Holders in such jurisdiction. In
any jurisdiction in which the securities laws or blue sky laws require the
Solicitations to be made by a licensed broker or dealer, the Solicitations will
be deemed to be made on behalf of AES by the Solicitation Agent or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
INCORPORATION OF DOCUMENTS BY REFERENCE
We are incorporating by reference the information we file with the
Securities and Exchange Commission, which means that we disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this Consent Solicitation
Statement, and information that we file later with the Securities and Exchange
Commission will automatically update and supersede this information. In
particular, our annual filing on Form 10-K will supersede all previously filed
annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports
on Form 8-K. We incorporate by reference the documents listed below and any
future filings made with the Securities and Exchange Commission under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to Expiration Time or the
termination of the Solicitations:
o Annual report on Form 10-K for the fiscal year ended December 31, 2001;
o Quarterly report on Form 10-Q for the quarters ended March 31, 2002, June
30, 2002 and September 30, 2002;
o Current Reports on Form 8-K filed on February 5, 2002, April 26, 2002, July
26, 2002, August 14, 2002, August 21, 2002, September 4, 2002, September 6,
2002, September 18, 2002, October 3, 2002, October 24, 2002, October 28,
2002, October 31, 2002, November 4, 2002, November 12, 2002, November 13,
2002, November 20, 2002, November 27, 2002, December 4, 2002, December 9,
2002, December 10, 2002, December 12, 2002, December 13, 2002, December 17,
2002, December 20, 2002 and January 31, 2003, February 20, 2003 and
February 28, 2003.
You may request a copy of these filings by writing or telephoning the
office of Brian A. Miller, Deputy General Counsel and Secretary, The AES
Corporation, 1001 North 19th Street, Arlington, Virginia, telephone number (703)
522-1315. If requested, we will provide copies of these filings, without charge,
by first class mail or other equally prompt means within one business day of
receipt of such request.
18
Questions concerning the terms of the Solicitations or requests for
additional copies of this Consent Solicitation Statement, the Consent Form or
other related documents should be directed to the Solicitation Agent:
Salomon Smith Barney
390 Greenwich Street
New York, New York 10013
Attn: Liability Management Group
(212) 723-6106
(800) 558-3745 (toll free)
Requests for assistance in completing the Consent Form should be directed
to the U.S. Tabulation and Information Agent. Holders of the 8.375% Senior Notes
may also contact the Luxembourg Tabulation and Information Agent for such
assistance.
The U.S. Information Agent for the Consent Solicitation is:
Mellon Investor Services LLC
44 Wall Street, 7th Floor
New York, New York 10005
Banks and Brokers call: (917) 320-6286
Toll free (866) 892-5621
The U.S. Tabulation Agent for the Consent Solicitation is:
Mellon Investor Services LLC
By facsimile:
(For Eligible Institutions only):
(201) 296-4293
(201) 296-4775
(201) 329-8936
Confirmation:
(201) 296-4860
By Mail: By Overnight Courier: By Hand:
P.O. Box 3301 85 Challenger Road 120 Broadway - 13th Floor
South Hackensack, NJ 07606 Mail Stop-Reorg New York, New York 10271
Ridgefield Park, NJ 07660
Attn: Reorganization Dept.
The Luxembourg Tabulation and Information Agent is:
Deutsche Bank Luxembourg SA
2 Boulevard Konrad Adenauer
L-1115 Luxembourg
Attention: [ ]
e-mail: [ ]
Tel: [ ]
Fax: [ ]
ANNEX A
THE AES CORPORATION
Solicitation of Consents Relating to Each of the
Series of its Debt Securities Listed Below
Principal Amount ISIN
Debt Securities Outstanding* CUSIP Number Number
--------------- ------------ ----------- ------
8.00% Senior Notes, Series A, Due 2008 $199,022,000 00130HAP0 US00130HAP01
8.375% Senior Notes, Series F, Due 2011 (pound)135,000,000 -- XS0125168780
4.50% Convertible Junior Subordinated Debentures Due 2005 $149,449,000 00130HAN5 US00130HAN5
TO: Mellon Investor Services LLC (as U.S. Tabulation and Information Agent)
Mellon Investor Services
44 Wall Street, 7th Floor
New York, NY 10005
Attn: Grainne McIntyre
Banks and brokers:
(917) 320-6286
Toll free: (866) 892-5621
Facsimile: (201) 296-4293
(201) 296-4775
(201) 329-8436
OR
Deutsche Bank Luxembourg SA (as Luxembourg Tabulation and Information Agent)* *
Deutsche Bank Luxembourg SA
2 Boulevard Konrad Adenauer
L-1115 Luxembourg
Attention: [ ]
e-mail: [ ]
Tel: [ ]
Fax: [ ]
These Solicitations are made by The AES Corporation ("AES") only to Holders
(as defined below) as of the Record Date (as defined below) of debt securities
of AES described in the table above (collectively, the "Debt Securities"), as
described in the accompanying Consent Solicitation Statement dated March [ ],
2003 (the "Consent Solicitation Statement"). The Consent Solicitation Statement
and the instructions accompanying this Consent Form should be read carefully
before this Consent Form is completed.
Capitalized terms used herein but not defined herein have the meanings
given to them in the Consent Solicitation Statement.
-----------------
* Excluding any Debt Securities owned by AES or its affiliates.
** Only Holders of the 8.375% Senior Notes may send Consent Forms to the
Luxembourg Tabulation and Information Agent.
Holders of the Debt Securities who wish to Consent must deliver their
properly completed and executed Consent Form by mail, first-class postage
prepaid, hand delivery, overnight courier or by facsimile transmission (with an
original to be delivered subsequently) to the U.S. Tabulation and Information
Agent (or, if preferred by any Holder of the 8.375% Senior Notes, the Luxembourg
Tabulation and Solicitation Agent) at its address or facsimile number set forth
above in accordance with the instructions set forth herein and in the Consent
Solicitation Statement. Consent Forms should not be sent to AES, the Trustee or
the Solicitation Agent. However, AES reserves the right to accept any Consent
received by it, the Trustee, or the Solicitation Agent. Under no circumstances
should any person tender or deliver Debt Securities to AES, the Trustee, the
Solicitation Agent or the Tabulation and Information Agents at any time.
Only Holders are eligible to Consent to the Proposed Amendment. Except as
provided in this paragraph, "Holder" means each person, other than AES and its
affiliates, shown on the record of the registrar for the Debt Securities as a
holder on 5:00 p.m., New York City time, on March 24, 2003 (the "Record Date").
For purposes of the Solicitations, the Depository Trust Company ("DTC") has
authorized DTC participants ("Participants") set forth in the position listing
of DTC as of the Record Date to execute Consent Forms as if they were the
Holders of the Debt Securities held of record in the name of DTC or the name of
its nominee. Accordingly, for purposes of the Solicitations, the term "Holder"
shall be deemed to include such Participants. Any beneficial owner of the Debt
Securities who is not a Holder of such Debt Securities must arrange with the
person who is the Holder or such Holder's assignee or nominee to execute and
deliver a Consent Form on behalf of such beneficial owner. AES reserves the
right to establish from time to time a new date as the Record Date with respect
to any Solicitations and, thereupon, any such new date will be deemed to be the
"Record Date" for purposes of such Solicitations. By executing this Consent
Form, the Holder waives any and all requirements under the Indentures regarding
the establishment of the Record Date, including any requirement that such date
be established on or by a specific date or during a specific period prior to the
Solicitations.
CONSENT
By execution hereof, the undersigned acknowledges receipt of the Consent
Solicitation Statement. The undersigned hereby represents and warrants that the
undersigned is a Holder of the Debt Securities indicated below and has full
power and authority to take the action indicated below in respect of such Debt
Securities. The undersigned will, upon request, execute and deliver any
additional documents deemed by AES to be necessary or desirable to perfect the
undersigned's Consent.
The undersigned acknowledges that the undersigned must comply with the
provisions of this Consent Form, and complete the information required herein,
to validly consent to the Proposed Amendment set forth in the Consent
Solicitation Statement. AES's obligation to accept the Consents and to pay the
Consent Fee for Consents validly delivered and not revoked is conditioned on,
among other things, there being validly delivered and unrevoked Consents to the
Proposed Amendment (as defined in the Consent Solicitation Statement) from the
Holders of not less than (i) a majority in aggregate principal amount of the
8.00% Senior Notes, Series A, Due 2008 (the "8.00% Senior Notes") and (ii) a
majority in aggregate principal amount of the 4.50% Convertible Junior
Subordinated Debentures Due 2005 (collectively, the "Requisite Consents").
Pursuant to a separate consent solicitation (the "Other Consent
Solicitation"), AES is seeking the consent of the holders of the 8.75% Senior
Notes, Series G, Due 2008, 9.50% Senior Notes, Series B, Due 2009, 9.375% Senior
Notes, Series C, Due 2010, 8.875% Senior Notes, Series E, Due 2011 and 7.375%
Remarketable or Redeemable Securities Due 2013 (collectively, together with the
8.00% Senior Notes and 8.375% Senior Notes, the "Senior Debt Securities"),
8.375% Senior Subordinated Notes Due 2007 (the "8.375% Senior Subordinated
Notes"), 10.25% Senior Subordinated Notes Due 2006 (the "10.25% Senior
Subordinated Notes"), 8.50% Senior Subordinated Notes Due 2007 (the "8.50%
Senior Subordinated Notes") and 8.875% Senior Subordinated Notes Due 2027 (the
"8.875% Senior Subordinated Notes" and together with the 8.375% Senior
Subordinated Notes, the 10.25% Senior Subordinated Notes and the 8.50% Senior
Subordinated Notes, the "Senior Subordinated Notes") to certain proposed
amendments. Our obligation to accept any Consents validly tendered in the
Solicitations and not revoked is conditioned on our receipt of the requisite
consents in the Other Consent Solicitation (the "Other Requisite Consents")
which means validly delivered and unrevoked consents to (a) the Material
Subsidiary Amendment (as defined herein) to the Senior Indenture and the
indentures governing the Senior Subordinated Notes (the "Senior Subordinated
Indentures") from the holders of not less than (i) a majority in aggregate
principal amount of the Senior Debt Securities (voting as a class) (pursuant to
the Other Consent Solicitation and the Solicitations), (ii) a majority in
aggregate principal amount of the 8.375% Senior Subordinated Notes, (iii) a
majority in aggregate principal amount of the 10.25% Senior Subordinated Notes,
and (iv) a majority in aggregate principal amount of the 8.50% Senior
Subordinated Notes and 8.875% Senior Subordinated Notes (voting as a class), and
(b) certain proposed amendments to the cross-acceleration and judgment default
provisions contained in the Senior Subordinated Indentures which would conform
these provisions to the comparable provisions in the Senior Indenture from the
holders of not less than (i) a majority in aggregate principal amount of the
8.375% Senior Subordinated Notes, (ii) a majority in aggregate principal amount
of the 10.25% Senior Subordinated Notes, and (iii) a majority in aggregate
principal amount of the 8.50% Senior Subordinated Notes and 8.875% Senior
Subordinated Notes (voting as a class).
AES's obligation to accept the Consents and pay the Consent Fee for
Consents validly delivered and not revoked is also conditioned on the prior or
concurrent execution and delivery by AES and the Trustee of a Supplemental
Indenture to each of the Indentures providing for the Proposed Amendment. Each
of the conditions is for the sole benefit of AES and AES may, in its sole
discretion, waive any or all of the conditions, in whole or in part, with
respect to the Solicitations of Consents from any or all series of Debt
Securities, at any time and from time to time. No Consent Fee will be paid if
any of the Conditions are not satisfied (or waived) for any reason. No Consent
Fee will be paid to any series of Debt Securities if the Solicitation with
respect to such series is terminated.
Please indicate by marking the appropriate box below whether you wish to
(i) consent to the Proposed Amendment or (ii) not consent to the Proposed
Amendment. The undersigned acknowledges that a Consent Form delivered pursuant
to any one of the procedures described under the heading "The Consent
Solicitation--Procedures for Consenting" in the Consent Solicitation Statement
and in the instructions hereto will constitute a binding agreement between the
undersigned and AES upon the terms and subject to the Conditions of the
Solicitations. The undersigned further understands that if no box is checked,
but this Consent Form is executed and delivered to the U.S. Tabulation and
Information Agent (or, if preferred by any Holder of the 8.375% Senior Notes,
the Luxembourg Tabulation and Information Agent), the undersigned will be deemed
to have consented to the Proposed Amendment. The undersigned hereby agrees that
it will not revoke any Consent it grants hereby except in accordance with the
procedures set forth herein and in the Consent Solicitation Statement.
------------------------------------------------------------------------
CONSENT DO NOT CONSENT
------------------------------------------------------------------------
[ ] [ ]
------------------------------------------------------------------------
Unless otherwise specified in the table below, this Consent Form relates to
the total principal amount of the Debt Securities held of record by the
undersigned at the close of business on the Record Date. If this Consent Form
relates to less than the total principal amount of the Debt Securities so held,
the undersigned has listed on the table below the serial numbers (with respect
to the Debt Securities not held by depositaries) and principal amount of the
Debt Securities for which consent is given. If the space provided below is
inadequate, list the certificate numbers and aggregate principal amounts on a
separate signed schedule and affix the list to this Consent Form. If you hold
more than one series of Debt Securities, you must execute and deliver a separate
Consent Form for each series of Debt Securities.
The undersigned authorizes the Tabulation and Information Agent to whom
this Consent Form is delivered to deliver this Consent Form and any proxy
delivered in connection herewith to AES and the Trustee as evidence of the
undersigned's actions with respect to the Proposed Amendments.
The undersigned hereby acknowledges that by executing this Consent Form it
waives any and all requirements under the Indentures regarding the establishment
of the Record Date, including any requirement that such date be established on
or by a specific date or during a specific period prior to the Solicitations.
The Consents shall be governed by and construed in accordance with the laws
of the State of New York.
________________________________________________________________________________
DESCRIPTION OF THE DEBT SECURITIES AS TO WHICH CONSENTS ARE GIVEN
________________________________________________________________________________
Series of Debt Securities with Respect
to Which Consents are Given* ___________________________________________
CUSIP: ___________________________________________
Aggregate Principal Principal Amount With
Name and Address DTC Participant Amount of Debt Respect to Which
of Holder** Number(s)*** Security(ies)**** Consents are Given***
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Total: Principal Amount Consenting $________________
________________________________________________________________________________
(pound)________________*****
________________________________________________________________________________
*Please indicate the name, interest rate and maturity of the Debt
Securities. If you hold more than one series of Debt Securities, you must
complete a separate Consent Form for each series of Debt Securities.
________________________________________________________________________________
**If you hold Debt Securities registered in different names, separate
Consent Forms must be executed covering each form of registration.
________________________________________________________________________________
***Required information.
________________________________________________________________________________
****Unless otherwise indicated in the column labeled "Principal Amount With
Respect to Which Consents Are Given," the Holder will be deemed to have
consented in respect of the entire aggregate principal amount indicated in the
column labeled "Aggregate Principal Amount of Debt Security(ies)." All principal
amounts must be in multiples of $1,000 except for principal amounts of 8.375%
Senior Notes which must be in multiples of (pound)1,000.
________________________________________________________________________________
*****To be provided for the 8.375% Senior Notes only.
________________________________________________________________________________
CONSENT FEE INSTRUCTIONS
Subject to the terms and conditions set forth herein and in the Consent
Solicitation Statement, AES agrees to make a one-time payment (the "Consent
Fee") to each Holder who timely delivers to the U.S. Tabulation and Information
Agent (or, if preferred by any Holder of the 8.375% Senior Notes, the Luxembourg
Tabulation and Information Agent) a valid and effective Consent that is not
subsequently properly revoked and that is accepted by AES. The Consent Fee will
be paid as stated under "The Consent Solicitation--Consent Fee" in the Consent
Solicitation Statement. The Consent Fee will be paid only to Holders whose
Consents are received by the applicable Tabulation and Information Agent prior
to 5:00 p.m., New York City time, on [ ], 2003 unless extended (the "Expiration
Time"), and so accepted by AES. Holders whose Consents are not received by the
applicable Tabulation and Information Agent on or prior to the applicable
Expiration Time will NOT be entitled to a Consent Fee. No Consent Fee will be
paid with respect to any series of Debt Securities if the Solicitation with
respect to such series is terminated. The method of delivery of all documents,
including fully executed Consent Forms, is at the election and risk of the
Holder.
In order for a Consent to be valid and effective, (a) the Consent Form must
be properly completed, executed and received by the U.S. Tabulation and
Information Agent (or, if preferred by any Holder of the 8.375% Senior Notes,
the Luxembourg Tabulation and Information Agent) on or prior to the Expiration
Time and (b) the Consent must not thereafter be properly revoked as provided
herein and in the Consent Solicitation Statement. AES's obligation to accept the
Consents and to pay the Consent Fee for Consents validly delivered and not
revoked is conditioned on:
o the Requisite Consents being validly delivered and not revoked;
o the Other Requisite Consents being validly delivered and not revoked;
o the completion of the Other Consent Solicitation;
o the prior or concurrent execution and delivery by AES and the Trustee
of a Supplemental Indenture to each of the Indentures providing for
the Proposed Amendment;
o the absence of any law or regulation which would, and the absence of
any injunction or action or other proceeding (pending or threatened)
which (in the case of any action or proceeding if adversely
determined) would, make unlawful or invalid or enjoin the
implementation of the Proposed Amendment or the payment of the Consent
Fee, or that would question the legality or validity thereof; and
o that (i) no change (or development involving a prospective change)
shall have occurred or shall be threatened in the business,
properties, assets, liabilities, financial condition, operations,
results of operations or prospects of AES, and (ii) no change (or
development involving a prospective change) shall have occurred in
financial markets generally or affecting the equity or debt securities
of AES that, in the reasonable judgment of AES in the case of either
(i) or (ii) above, is or may be adverse to AES or may have a material
adverse effect upon the contemplated benefits to AES of the
Solicitations.
The above conditions are for the sole benefit of AES and AES may, in its
sole discretion, waive any of the conditions, in whole or in part, with respect
to the Solicitations of Consents from all or any series of Debt Securities, at
any time and from time to time. No Consent Fee will be paid if any of the
Conditions are not satisfied (or waived) for any reason.
AES, in its sole discretion and regardless of whether any of the Conditions
have been satisfied, subject to applicable law, at any time prior to the
effectiveness of the Proposed Amendment, may terminate or amend any Solicitation
for any reason. In the event that a Solicitation is terminated with respect to
any series of Debt Securities, no Consent Fee will be paid with respect to the
Solicitation for such series of Debt Securities.
The Consent Fee may be paid by check or by wire transfer. Please indicate
below to whom the Consent Fee should be paid.
For check:
--------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
--------------------------------------------------------------------------------
To be completed ONLY if the check for the Consent Fee is to be issued in
the name of and sent to someone other than the undersigned.
--------------------------------------------------------------------------------
Issue Check to:
--------------------------------------------------------------------------------
Name:.................................................................
(Please Print)
Address:..............................................................
......................................................................
......................................................................
(Include Zip Code)
......................................................................
(Taxpayer Identification or Social Security Number(s)* of Payee)
--------------------------------------------------------------------------------
*Please also complete the enclosed substitute Form W-9.
--------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------
To be completed ONLY if the check for the Consent Fee is to be sent to
someone other than the undersigned, or to the undersigned at an address other
than that shown on the following page.
--------------------------------------------------------------------------------
Mail Check to:
--------------------------------------------------------------------------------
Name:.................................................................
(Please Print)
Address:..............................................................
......................................................................
......................................................................
(Include Zip Code)
--------------------------------------------------------------------------------
For wire transfer:
--------------------------------------------------------------------------------
WIRE TRANSFER INSTRUCTIONS
--------------------------------------------------------------------------------
(Please Print)
--------------------------------------------------------------------------------
Bank Name:..................................................................
City, State:................................................................
ABA #:......................................................................
Account Name:...............................................................
Checking A/C #:.............................................................
f/f/c #:....................................................................
Re:.........................................................................
--------------------------------------------------------------------------------
IMPORTANT - READ CAREFULLY
If this Consent Form is executed by the Holder, it must be executed in
exactly the same manner as the name of the Holder appears on the Debt
Securities. An authorized DTC Participant must execute this Consent Form exactly
as its name appears on DTC's position listing as of the Record Date. If the Debt
Securities are held of record by two or more joint Holders, all such Holders
must sign the Consent Form. If a signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
Holder acting in a fiduciary or representative capacity, such person should so
indicate when signing and must submit proper evidence satisfactory to AES of
such person's authority to so act. If a Holder has Debt Securities registered in
different names, separate Consent Forms must be executed covering each form of
registration. If a Consent Form is executed by a person other than the Holder,
then such person must have been authorized by proxy or in some other manner
acceptable to AES to execute this Consent Form with respect to the applicable
Debt Securities on behalf of the Holder. Any beneficial owner of the Debt
Securities who is not a Holder of record of such Debt Securities must arrange
with the person who is the Holder of record or such Holder's assignee or nominee
to execute and deliver this Consent Form on behalf of such beneficial owner.
SIGN HERE
________________________________________________________________________________
________________________________________________________________________________
Signature(s) of Holder(s)
Date:___________________________________________________________________________
Name(s):________________________________________________________________________
(Please Print)
Capacity (full title):__________________________________________________________
Address:________________________________________________________________________
(Include Zip Code)
Area Code and Telephone No.:____________________________________________________
Tax Identification or Social Security No.:______________________________________
GUARANTEE OF SIGNATURE(S)
(If required, see instructions 6 and 7 below)
Authorized Signature:___________________________________________________________
Name and Title:_________________________________________________________________
(Please Print)
Date:___________________________________________________________________________
Name of Firm:___________________________________________________________________
________________________________________________________________________________
INSTRUCTIONS FOR CONSENTING HOLDERS, FORMING PART
OF THE TERMS AND CONDITIONS OF THE SOLICITATIONS
1. Delivery of this Consent Form. Upon the terms and subject to the
conditions set forth herein and in the Consent Solicitation Statement, a
properly completed and duly executed copy of this Consent Form and any other
documents required by this Consent Form must be received by the U.S. Tabulation
and Information Agent (or, if preferred by any Holder of the 8.375% Senior
Notes, the Luxembourg Tabulation and Information Agent) at its address or
facsimile number set forth on the cover hereof on or prior to the Expiration
Time (provided that the executed original of each document sent by facsimile
transmission on or prior to the Expiration Time must be received by such
Tabulation and Information Agent at its address prior to 5:00 p.m., New York
City time, on the third business day following the Expiration Time). The method
of delivery of this Consent Form and all other required documents to the
applicable Tabulation and Information Agent is at the risk of the Holder, and
the delivery will be deemed made only when actually received by the applicable
Tabulation and Information Agent. In all cases, sufficient time should be
allowed to assure timely delivery. No Consent Form should be sent to any person
other than the U.S. Tabulation and Information Agent (or, if preferred by any
Holder of the 8.375% Senior Notes, the Luxembourg Tabulation and Information
Agent). Holders of the 8.375% Senior Notes may send their Consent Forms to
either the U.S. Tabulation and Information Agent or the Luxembourg Tabulation
Agent but not both. Duplicate Consent Forms will not be accepted.
Any beneficial owner of Debt Securities who is not a Holder of such Debt
Securities (e.g., if such securities are held in the name of DTC or the
beneficial owner's broker, dealer, commercial bank, trust company or other
nominee institution) must arrange with the person who is the Holder or such
Holder's assignee or nominee to execute and deliver this Consent Form on behalf
of such beneficial owner.
2. Expiration Time. Each Solicitation expires at 5:00 p.m., New York City
time, on [ ], 2003, unless AES, in its sole discretion, extends the period
during which any Solicitation is open, in which case the term "Expiration Time"
shall mean the latest date and time to which such Solicitation is extended. In
order to extend the Expiration Time, AES will notify the Tabulation and
Information Agents in writing or orally of any extension and will make a public
announcement thereof in both the United States and Luxembourg, each not later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Time. AES may extend any Solicitation on a daily
basis or for such specified period of time as it determines in its sole
discretion. Failure by any Holder or beneficial owner of the Debt Securities to
learn of such public announcement will not affect the extension of such
Solicitation.
3. Questions Regarding Validity, Form, Legality, etc. All questions as to
the validity, form, eligibility (including time of receipt) and acceptance of
Consents and revocations of Consents will be resolved by AES whose
determinations will be binding. AES reserves the absolute right to reject any or
all Consents and revocations that are not in proper form or the acceptance of
which could, in the opinion of AES's counsel, be unlawful. AES also reserves the
right to waive any irregularities in connection with deliveries which AES may
require to be cured within such time as AES determines. None of AES, the
Trustee, the Solicitation Agent, the Tabulation and Information Agents or any
other person shall have any duty to give notification of any such irregularities
or waiver, nor shall any of them incur any liability for failure to give such
notification. Deliveries of Consent Forms or notices of revocation will not be
deemed to have been made until such irregularities have been cured or waived.
AES's interpretation of the terms and conditions of each Solicitation (including
this Consent Form and the accompanying Consent Solicitation Statement and the
instructions hereto and thereto) will be final and binding on all parties.
4. Holders Entitled to Consent. Only a Holder as defined herein (or its
representative or attorney-in-fact) or another person who has complied with the
procedures set forth below may execute and deliver a Consent Form. For purposes
of the Solicitations, the term "Holder" shall be deemed to include DTC
Participants through which a beneficial owner's Debt Securities may be held of
record as of the Record Date in DTC. Any beneficial owner or registered holder
of the Debt Securities who is not the Holder thereof (e.g., if such securities
are held in the name of DTC or the beneficial owner's broker, dealer, commercial
bank, trust company or other nominee institution) must arrange with such
Holder(s) or such Holder's assignee or nominee to execute and deliver this
Consent Form to the U.S. Tabulation and Information Agent (or, if preferred by
any Holder of the 8.375% Senior Notes, the Luxembourg Tabulation and Information
Agent) on behalf of such beneficial owner. All properly
completed and executed Consent Forms received prior to the Expiration Time will
be counted, notwithstanding any transfer of the Debt Securities to which such
Consent Form relates, unless the applicable Tabulation and Information Agent
which receives such Consent Form receives from the Holder who submitted the
Consent Form (or a subsequent holder which has received a proxy from the
relevant Holder) a written notice of revocation or a changed Consent Form
bearing a date later than the date of the prior Consent Form prior to the
Expiration Time.
5. Waiver of Rights Under Indenture with Respect to the Establishment of
the Record Date. By executing the Consent Form, the Holder will be deemed to
waive any and all requirements under the Indentures regarding the establishment
of the Record Date, including any requirement that such date be established on
or by a specific date or during a specific period prior to the Solicitations.
6. Signatures on this Consent Form. If this Consent Form is signed by the
Holder(s) of the Debt Securities with respect to which this Consent is given,
the signature(s) of such Holder(s) must correspond with the name(s) as contained
on the books of the register maintained by the Trustee or as set forth in DTC's
position listing without alteration, enlargement or any change whatsoever.
If any of the Debt Securities with respect to which this Consent is given
were held of record on the Record Date by two or more joint Holders, all such
Holders must sign this Consent Form. If any Debt Securities with respect to
which this Consent is given have different Holders, it will be necessary to
complete, sign and submit as many separate copies of this Consent Form and any
necessary accompanying documents as there are different Holders.
If this Consent Form is signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should indicate such fact
when signing, and, unless waived by AES, evidence satisfactory to AES of their
authority to so act must be submitted with this Consent Form.
7. Signature Guarantees. All signatures on this Consent Form must be
guaranteed by a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, including (as such terms are
defined therein): (a) a bank; (b) a broker, dealer, municipal securities dealer,
municipal securities broker, government securities dealer or government
securities broker; (c) a credit union; (d) a national securities exchange,
registered securities association or clearing agency; or (e) a savings
institution that is a participant in a Securities Transfer Association
recognized program (each an "Eligible Institution"). However, signatures need
not be guaranteed if this Consent is given by or for the account of an Eligible
Institution. If the Holder of the Debt Securities is a person other than the
signer of this Consent Form, see Instruction 6.
8. Revocation of Consent. Any Holder of the Debt Securities as to which a
Consent has been given may revoke such Consent as to such Debt Securities or any
portion of such Debt Securities (in integral multiples of $1,000 for all Debt
Securities other than the 8.375% Senior Notes and in integral multiples of
(pound)1,000 for the 8.375% Senior Notes) by delivering a written notice of
revocation or a changed Consent Form bearing a date later than the date of the
prior Consent Form to the Tabulation and Information Agent to whom the prior
Consent Form was delivered at any time prior to the Expiration Time. The
transfer of the Debt Securities after the Record Date will not have the effect
of revoking any Consent theretofore validly given by a Holder of such Debt
Securities, and each properly completed and executed Consent Form will be
counted notwithstanding any transfer of the Debt Securities to which such
Consent relates, unless the procedure for revoking Consents described below has
been complied with.
To be effective, a notice of revocation must be in writing, must contain
the name of the Holder, and the aggregate principal amount of the Debt
Securities to which it relates and must be (a) signed in the same manner as the
original Consent Form or (b) signed by the transferee of the relevant Debt
Securities and accompanied by a duly executed proxy or other authorization from
the relevant Holder (in form satisfactory to AES). All revocations of Consents
must be sent to the Tabulation and Information Agent to whom the prior Consent
Form was delivered at its address set forth in this Consent Form.
To be effective, the revocation must be executed by the Holder of such Debt
Securities in the same manner as the name of such Holder appears on the books of
the register maintained by the Trustee or as set forth in DTC's position listing
without alteration, enlargement or any change whatsoever. If a revocation is
signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, such person must
indicate such fact when signing and must submit with the revocation appropriate
evidence of authority to execute the revocation. A revocation of the Consent
will be effective only as to the Debt Securities listed on the revocation and
only if such revocation complies with the provisions of this Consent Form and
the Consent Solicitation Statement. If a Holder wishes to revoke its Consent
with respect to more than one series of Debt Securities, the Holder must
complete a separate notice of revocation with respect to each series of Debt
Securities. Only a Holder of the Debt Securities is entitled to revoke a Consent
previously given. A beneficial owner of the Debt Securities must arrange with
the Holder to execute and deliver on its behalf a revocation of any Consent
already given with respect to such Debt Securities. A transfer of Debt
Securities after the Record Date must be accompanied by a duly executed proxy
from the relevant Holder if the subsequent transferee is to have revocation
rights with respect to the relevant Consent to the Proposed Amendments. A
purported notice of revocation that is not received by the Tabulation and
Information Agent to whom the prior Consent Form was delivered in a timely
fashion and accepted by AES as a valid revocation will not be effective to
revoke a Consent previously given.
A revocation of a Consent may only be rescinded by the delivery of a
written notice of revocation to the Tabulation and Information Agent to whom the
prior notice of revocation was delivered or the execution and delivery of a new
Consent Form. A Holder who has delivered a revocation may thereafter deliver a
new Consent Form by following one of the described procedures at any time prior
to the Expiration Time.
Prior to the Expiration Time, AES intends to consult with the Tabulation
and Information Agents to determine whether the Tabulation and Information
Agents have received any revocations of Consents. AES reserves the right to
contest the validity of any such revocations.
9. Waiver of Conditions. AES reserves the absolute right, subject to
applicable law, at any time prior to the effectiveness of the Proposed
Amendments to amend, waive or modify the terms and conditions of the
Solicitations with respect to any or all series of Debt Securities.
10. Termination. AES reserves the right, in its sole discretion and
regardless of whether any of the Conditions as described under "--Conditions to
the Consent Solicitation" in the Consent Solicitation Section, have been
satisfied, subject to applicable law, at any time prior to the effectiveness of
the Proposed Amendment, to terminate any Solicitation for any reason. In the
event a Solicitation with respect to a series of Debt Securities is abandoned or
terminated prior to the effectiveness of the Proposed Amendment, any Consents
given with respect to such Solicitation will be voided and no Consent Fee will
be paid the Holders of such series of Debt Securities with respect to such
Consents.
11. Duration of Validity of Consents. If the Proposed Amendment has not
become effective on or before the date which is six months after the Record
Date, then no Consent shall be valid, and AES shall not be obligated to pay any
Consent Fee in respect of any such Consent.
12. Questions and Requests for Assistance and Additional Copies. Questions
concerning the terms of the Solicitations should be directed to the Solicitation
Agent at the address and telephone and facsimile number indicated on the back
page of this Consent Form. Requests for assistance in completing this Consent
Form or for additional copies of the Consent Solicitation Statement, this
Consent Form or other related documents should be directed to the U.S.
Tabulation and Information Agent, whose address and telephone number appear on
the back of this Consent Form. Holders of the 8.375% Senior Notes may also
contact the Luxembourg Tabulation and Information Agent with respect to such
requests.
IMPORTANT INFORMATION REGARDING FEDERAL INCOME TAX BACKUP WITHHOLDING
The discussion of federal income tax backup withholding set forth below is
included for general information only. Each Holder is urged to consult such
Holder's tax advisor to determine the particular federal income tax backup
withholding consequences to such Holder of the Consents and receipt of the
Consent Fee. The discussion does not consider the effect of any applicable
foreign, state, local, or other tax withholding laws. Foreign persons should
consult their tax advisors regarding applicable federal tax withholding
requirements.
Substitute Form W-9
Under the federal income tax laws, the Trustee may be required to withhold
30% of the amount of any payment made to certain Holders pursuant to the
Solicitations. In order to avoid such backup withholding, each Holder must
provide the Trustee with such Holder's correct Taxpayer Identification Number
("TIN") by completing and returning the Substitute Form W-9 included herein. In
general, if a Holder is an individual, the TIN is the Social Security number of
such individual. If the Trustee is not provided with the correct TIN, the Holder
may be subject to a $50 penalty imposed by the Internal Revenue Service. Certain
Holders (including, among others, most corporations) are not subject to these
backup withholding and reporting requirements. These Holders should enter the
correct TIN in Part I of the Substitute Form W-9, check the "Exempt from Backup
Withholding" box in Part 3 of the Substitute Form W-9, sign under the
certification and date the form.
Consequences of Failure to File Substitute Form W-9
Failure to complete the Substitute Form W-9 may require the Trustee to
withhold 30% of the amount of any payments made pursuant to the Solicitations.
Backup withholding is not an additional federal income tax. Rather, the federal
income tax liability of a person subject to backup withholding will be reduced
by the amount of tax withheld. If withholding results in an overpayment of
taxes, the Holder may claim a refund from the Internal Revenue Service.
-----------------------------------------------------------------------------------------------------------------------------------
___________________________________
SUBSTITUTE SOCIAL SECURITY NUMBER
FORM W-9 PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND
CERTIFY BY SIGNING AND DATING BELOW OR
___________________________________
EMPLOYER IDENTIFICATION NUMBER
-----------------------------------------------------------------------------------------------------------------------------------
PART 2 -- CERTIFICATION -- UNDER PENALTIES OF PART 3 --
PERJURY, I CERTIFY THAT:
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE (1) THE NUMBER SHOWN ON THIS FORM IS MY [ ]
CORRECT TAXPAYER IDENTIFICATION NUMBER,
PAYOR'S REQUEST FOR TAXPAYER EXEMPT FROM BACKUP
IDENTIFICATION NUMBER (TIN) WITHHOLDING
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING
___________________________________________ BECAUSE (a) I AM EXEMPT FROM BACKUP
NAME WITHHOLDING, (b) I HAVE NOT BEEN
NOTIFIED BY THE INTERNAL REVENUE SERVICE
___________________________________________ ("IRS") THAT I AM SUBJECT TO BACKUP
NAME OF BUSINESS (IF DIFFERENT) WITHHOLDING AS A RESULT OF FAILURE TO
REPORT ALL INTEREST OR DIVIDENDS, OR (c)
___________________________________________ THE IRS HAS NOTIFIED ME THAT I AM NO
ADDRESS (NUMBER AND STREET) LONGER SUBJECT TO BACKUP WITHHOLDING,
AND
___________________________________________
CITY, STATE AND ZIP CODE
(3) I AM A U.S. PERSON (INCLUDING A U.S.
RESIDENT ALIEN).
---------------------------------------------------------------------------------
CERTIFICATE INSTRUCTIONS - YOU MUST CROSS OUT ITEM (2) IN PART 2 ABOVE IF YOU
HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE
OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF AFTER
BEING NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING YOU
RECEIVED ANOTHER NOTIFICATION FROM THE IRS STATING THAT YOU ARE NO LONGER
SUBJECT TO BACKUP WITHHOLDING, DO NOT CROSS OUT ITEM (2).
SIGNATURE_________________________________ DATE ______________________, 2003
-----------------------------------------------------------------------------------------------------------------------------------
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 30% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE CONSENT SOLICITATIONS.
Questions concerning the terms of the Solicitations or requests for
additional copies of this Consent Solicitation Statement, the Consent Form or
other related documents should be directed to the Solicitation Agent:
Salomon Smith Barney
390 Greenwich Street
New York, New York 10013
Attn: Liability Management Group
(212) 723-6106
(800) 558-3745 (toll free)
Requests for assistance in completing the Consent Form should be directed
to the U.S. Tabulation and Information Agent. Holders of the 8.375% Senior Notes
may also contact the Luxembourg Tabulation and Information Agent for such
assistance.
The U.S. Information Agent for the Consent Solicitations is:
Mellon Investor Services LLC
44 Wall Street, 7th Floor
New York, New York 10005
Banks and Brokers call: (917) 320-6286
Toll free (866) 892-5621
The U.S. Tabulation Agent for the Consent Solicitations is:
Mellon Investor Services LLC
By facsimile:
(For Eligible Institutions only):
(201) 296-4293
(201) 296-4775
(201) 329-8936
Confirmation:
(201) 296-4860
By Mail: By Overnight Courier: By Hand:
P.O. Box 3301 85 Challenger Road 120 Broadway - 13th Floor
South Hackensack, NJ 07606 Mail Stop-Reorg New York, New York 10271
Ridgefield Park, NJ 07660
Attn: Reorganization Dept.
The Luxembourg Tabulation and Information for the Consent Solicitation is:
Deutsche Bank Luxembourg SA
2 Boulevard Konrad Adenauer
L-1115 Luxembourg
Attention: [ ]
e-mail: [ ]
Tel: [ ]
Fax: [ ]
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
-- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
For this type of account: Give the SOCIAL For this type of account: Give the EMPLOYER
SECURITY number of-- IDENTIFICATION number
for --
1. An individual's account The individual 6. A valid trust, estate, or The legal entity (4)
pension trust
2. Two or more individuals (joint The actual owner of the 7. Corporate account The corporation
account) account or, if combined
funds, the first
individual on the
account (1)
8. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
3. Custodian account of a minor The minor (2) 9. Partnership account The partnership
(Uniform Gift to Minors Act)
10. A broker or registered nominee The broker or nominee
4. a. The usual revocable savings trust The grantor-trustee (1) 11. Account with the Department of The public entity
account (grantor is also trustee) Agriculture in the name of a
b. So-called trust account that is The actual owner (1) public entity (such as a State
not a legal or valid trust under or local government, school
State law district or prison) that receives
agricultural programpayments
5. Sole proprietorship account The owner (3)
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must
be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business
or "DBA" name. You may use either your SSN or EIN (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN of the personal representative or trustee
unless the legal entity itself is not designated in the account title.)
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Obtaining a Number. If you do not have a TIN, apply for one immediately. To
apply for an SSN, get Form SS-5, Application for a Social Security Card, from
your local Social Security Administration office. Get Form W-7, Application for
IRS Individual Taxpayer Identification Number, to apply for an ITIN or Form
SS-4, Application for Employer Identification Number, to apply for an EIN. You
can get Forms W-7 and SS-4 from the IRS by calling 1-800-TAX-FORM
(1-800-829-3676) or from the IRS's Internet Web Site at www.irs.gov.
Name. If you are an individual, you must generally enter the name shown on
your social security card. However, if you have changed your last name, for
instance, due to marriage without informing the Social Security Administration
of the name change, enter your first name, the last name shown on your social
security card, and your new last name.
Limited liability company (LLC). If you are a single-member LLC (including
a foreign LLC with a domestic owner) that is disregarded as an entity separate
from its owner under Treasury regulations section 301.7701-3, enter the owner's
name on the "Name" line. Enter the LLC's name on the "Business name" line.
Other entities. Enter your business name as shown on required Federal tax
documents on the "Name" line. This name should match the name shown on the
charter or other legal document creating the entity. You may enter any business,
trade, or DBA name on the "Business name" line.
Exempt from backup withholding. If you are exempt, enter your name as
described above, then check the "Exempt from backup withholding" box in Part 3,
enter your TIN and sign and date the form. See "Payees Exempt from Backup
Withholding" below.
If you are a resident alien and you do not have and are not eligible to get
an SSN, your TIN is your IRS individual taxpayer identification number (ITIN).
Enter it in the social security number box.
If you are a non-resident alien or a foreign entity, you generally cannot
submit a Form W-9 or Substitute Form W-9. Consult your tax advisor for further
information.
Payees Exempt from Backup Withholding
-------------------------------------
Payees generally exempt from backup withholding include the following:
o A corporation.
o An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7) if the
account satisfies the requirements of section 401(f)(2).
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
o An international organization or any agency, or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
o A foreign central bank of issue.
Privacy Act Notice. -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes and to help verify the accuracy of tax returns. The IRS may also
provide this information to the Department of Justice for civil and criminal
litigation, and to cities, states, and the District of Columbia to carry out
their tax laws. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 30% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
Penalties
---------
(1) Penalty for Failure to Furnish Taxpayer Identification Number. -- If
you fail to furnish your correct taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding. -- If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
(4) Misuse of Taxpayer Identification Numbers. -- If the payer discloses or
uses taxpayer identification numbers in violation of Federal law, the payer may
be subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE