SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (date of earliest event reported): July 28, 1999
DUKE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 1-4928 56-0205520
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
526 South Church Street
Charlotte, North Carolina 28202-1904
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 704-594-6200
Item 5. Other Events.
Duke Energy Corporation (the "registrant"), through its wholly owned
subsidiary Duke Energy International, L.L.C. ("DEI") recently acquired, or
entered into agreements to acquire, approximately 3,800 megawatts of power
generation facilities in Latin America for a total cost of approximately $1.2
billion. Further descriptions of the transactions may be found below and in the
press releases filed as exhibits to this Form 8-K.
On August 4, 1999, the registrant acquired 71% of the voting stock of
Companhia de Geracao de Energia Electrica Paranapanema ("Paranapanema"), the
eleventh largest generating company in Brazil. The acquisition was the result of
the registrant's winning bid of approximately $680 million submitted July 28,
1999, in the on-going privatization of Brazil's electric utilities. Located in
the state of Sao Paulo, Paranapanema has a total installed capacity of 2,307
megawatts and includes eight hydroelectric generating facilities along the
Paranapanema River.
The registrant was the successful bidder on July 30, 1999 in a
privatization of an 80% interest in the generating company, Generadora Acajutla,
S.A. de C.V., and a 97% interest in the generating company,
Generadora Salvadorena, S.A. de C.V., presently owned by El Salvador. The bid
was $125 million for a controlling interest in 275 megawatts of thermal power
generation. The transaction is expected to close in early September.
The registrant entered into an agreement on August 2, 1999 to acquire the
hydroelectric, natural gas and diesel power generation businesses of Dominion
Resources, Inc. in four countries in South America for $405 million. The
transaction is expected to close before the end of the year after receipt of
appropriate government consents and approvals. The businesses being acquired
have gross ownership interest totaling approximately 1,200 megawatts of gross
generation capacity.
Upon completion of all three transactions, the registrant's portfolio of
Latin American and Asia-Pacific assets will include operations and ownership
interests in approximately 6,700 megawatts of power generation, approximately
1,800 miles of natural gas pipeline and 245 miles of electric transmission,
located in Argentina, Australia, Belize, Bolivia, Brazil, Chile, Ecuador, El
Salvador, Indonesia, New Zealand and Peru.
Copies of the registrant's press releases announcing the acquisitions
described above are filed herewith as Exhibits 99.1, 99.2 and 99.3 respectively,
and are incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The following exhibits are filed herewith:
99.1. Press Release of registrant dated July 28, 1999
99.2 Press Release of registrant dated July 30, 1999
99.3 Press Release of registrant dated August 2, 1999
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DUKE ENERGY CORPORATION
(registrant)
By: ________________________
Richard J. Osborne
Executive Vice President
and Chief Financial Officer
Dated: August 5, 1999
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Exhibit Index
Exhibit Description
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99.1 Press Release of registrant dated July 28, 1999
99.2 Press Release of registrant dated July 30, 1999
99.3 Press Release of registrant dated August 2, 1999
Exhibit 99.1
July 28, 1999 CONTACT: Bryant Kinney
Duke Energy
704/382-2208
Raffaella Menezes
Hill & Knowlton - Brazil
(55-11) 5505-3738
DUKE ENERGY WINS PRIVATIZATION BID FOR
LEADING BRAZILIAN GENERATING COMPANY
SAO PAULO, BRAZIL -- Duke Energy International (DEI), a subsidiary of Duke
Energy, announced it was the successful bidder in today's privatization of
Companhia de Geracao de Energia Eletrica Paranapanema (Paranapanema) - Brazil's
eleventh largest electric generating company. DEI's bid for a controlling
interest in Paranapanema was approximately $US 680 million. DEI will assume
operational control of the company following the signing of the Concession
Contract, scheduled for late September.
Paranapanema is one of three companies formerly constituting the Sao Paulo
Energy Company and the first of the three to be privatized. It is Brazil's
second main electric generating company privatization, following that of Gerasul
in 1998. Located in the State of Sao Paulo, Paranapanema has a total installed
capacity of 2,307 megawatts and includes eight high-quality hydroelectric
generation facilities located along the Paranapanema River that produced
approximately 14,120 gigawatt hours in 1998.
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"Paranapanema is an excellent addition to DEI's growing Latin American portfolio
of integrated energy assets and trading and marketing business," said DEI
President and CEO Bruce Williamson. "Located in the industrial heartland of
Brazil and MERCOSUR, Paranapanema provides DEI opportunities to supply the
region's growing demand for electricity and energy services."
"Latin America is one of the largest and most dynamic energy markets in the
world," Williamson said. "DEI will leverage the technical and operational
expertise, market experience and financial strength of Paranapanema to develop,
manage and own integrated energy assets and establish itself as a leading energy
company in Brazil. It is a key component of our Latin American growth strategy."
In Latin America, DEI's energy business spans the entire energy value chain from
exploration, production, gathering, processing and transportation of natural gas
through to generation, electric transmission and energy trading and marketing.
Once the Paranapanema purchase is finalized, DEI's diverse portfolio of assets
will include operations and ownership in approximately 4,400 megawatts of power
generation, 125 miles of natural gas pipeline and 245 miles of electric
transmission located throughout Argentina, Brazil, Chile, Ecuador and Peru.
Duke Energy International, a subsidiary of Duke Energy, is a leading owner,
operator and developer of integrated energy projects in Asia Pacific and Latin
America. DEI's diverse investment and asset portfolio spans the entire energy
value chain from exploration, production, gathering, processing and
transportation of natural gas through to generation, electric transmission and
energy trading and marketing.
Duke Energy (NYSE:DUK) is a global energy company with more than $26 billion in
assets. Headquartered in Charlotte, N.C., the company reaches into more than 50
countries, producing energy, transporting energy, marketing energy and providing
energy services. In the United States, Duke Energy companies provide electric
service to approximately two million customers in North Carolina and South
Carolina; operate interstate pipelines that deliver natural gas to various
regions of the country; and are leading marketers of electricity, natural gas
and natural gas liquids. Additional information about the company is available
on the Internet at:
www.duke-energy.com
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Exhibit 99.2
July 30, 1999 CONTACT: Randy Wheeless
Phone: 704/382-8379
24-Hour: 704/382-8333
Jennifer Pierce
Phone: 713/627-5719
DUKE ENERGY WINS AUCTION FOR
CENTRAL AMERICAN GENERATION ASSETS
HOUSTON -- Duke Energy International (DEI), a subsidiary of Duke Energy,
announced it was the successful bidder in today's privatization of El
Salvadorian generating companies Generadora Acajutla S.A. de C.V. (Acajutla) and
Generadora Salvadorena, S.A. de C.V., presently part of the government-owned
utility Comision Ejecutiva Hidroelectrica del Rio Lempa (CEL). DEI's bid for
controlling interest in 275 megawatts of thermal power generation was $125
million. DEI will assume operational control upon financial closing.
DEI also announced a $75 million modernization of Generadora Acajutla which will
add approximately 155 megawatts of combined-cycle electric generation. The
company plans to begin construction of the facility in early September with
completion scheduled for late 2001.
"El Salvador's leadership in Central America's electric system integration
and market reforms make it an attractive place to invest," said DEI President
and CEO Bruce Williamson. "The
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acquisition of these generating assets provide DEI an early entry into El
Salvador's deregulating electricity market. Given their existing grid connection
to Guatemala and Honduras in 2001, they provide a solid platform for growth
through generation, asset development and trading and marketing across Central
America."
El Salvador is the second largest economy in Central America and is one of the
most stable political and macroeconomic countries in Latin America.
Privatization of state-owned assets began in 1995 and to date has included
telecommunications, electric distribution and the pension system. Generadora
Acajutla and Generadora Salvadorena are the first privatizations of
government-owned generating companies.
Once the El Salvador purchase is finalized, DEI's diverse portfolio of Latin
American assets will include operations and ownership in approximately 4, 700
megawatts of power generation, 125 miles of natural gas pipeline and 245 miles
of electric transmission located throughout Argentina, Brazil, El Salvador,
Chile, Ecuador and Peru.
Duke Energy International, a subsidiary of Duke Energy, is a leading owner,
operator and developer of integrated energy projects in Asia Pacific and Latin
America. DEI's diverse investment and asset portfolio spans the entire energy
value chain from exploration, production, gathering, processing and
transportation of natural gas to generation, electric transmission and energy
trading and marketing.
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Duke Energy (NYSE:DUK) is a global energy company with more than $26 billion in
assets. Headquartered in Charlotte, N.C., the company reaches into more than 50
countries, producing energy, transporting energy, marketing energy and providing
energy services. In the United States, Duke Energy companies provide electric
service to approximately two million customers in North Carolina and South
Carolina; operate interstate pipelines that deliver natural gas to various
regions of the country; and are leading marketers of electricity, natural gas
and natural gas liquids. Additional information about the company is available
on the Internet at:
www.duke-energy.com
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Exhibit 99.3
August 2, 1999 CONTACTS:
Jennifer Pierce 713/627-5719
Bryant Kinney 704/382-2208
DUKE ENERGY INTERNATIONAL TO PURCHASE
DOMINION RESOURCES' LATIN AMERICAN PORTFOLIO
THIRD LATIN AMERICAN PURCHASE BY DUKE ENERGY'S INTERNATIONAL UNIT WITHIN ONE
WEEK
HOUSTON -- Duke Energy International announced today it will purchase Dominion
Resources Inc.'s portfolio of hydroelectric, natural gas and diesel power
generation businesses in Argentina, Belize, Bolivia and Peru for $405 million.
The businesses being purchased total approximately 1,200 megawatts of gross
generation capacity. The stock purchase brings Duke Energy International's total
Latin American asset purchases in the past week to approximately 3,800
megawatts.
The transaction is expected to be completed before the end of the year after
receiving appropriate government consents and approvals and financial closing.
"This purchase, along with our recent successes in Brazil and El Salvador,
positions Duke Energy International to become Latin America's first truly
regional power generation and energy trading and marketing company," said Duke
Energy International President and Chief Executive
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Officer Bruce A. Williamson. "These assets will provide tremendous synergies
with our existing portfolio along with the Brazilian and El Salvadorian
companies we acquired last week.
"Duke Energy's shareholders will be rewarded with immediate improvements in
earnings per share when we complete these transactions and emerge as one of
Latin America's premier energy companies. Duke Energy will be as strong a
company in Latin America as it is in North America," Williamson said. "We look
forward to continuing to build upon the very positive relationship with Dominion
Resources that we developed throughout this transaction as they too become a gas
and electric convergence company."
In the last week, Duke Energy International acquired generating companies in
Brazil (Paranapanema) and El Salvador (Generadora Acajutla and Generadora
Salvadorena). Once all three transactions close, Duke Energy International's
diverse portfolio of Latin American and Asia-Pacific assets will include
operations and ownership interests in approximately 6,700 megawatts of power
generation, approximately 1,800 miles of natural gas pipeline and 245 miles of
electric transmission, located throughout Argentina, Australia, Belize, Bolivia,
Brazil, Chile, Ecuador, El Salvador, Indonesia, New Zealand and Peru.
Duke Energy International also has operating energy marketing and trading
businesses and development offices in Sydney, Australia; Buenos Aires,
Argentina; London, England; and Manila, the Philippines. And has ownership
interests in methanol and MTBE manufacturing facilities in Saudi Arabia.
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Duke Energy International (DEI), a subsidiary of Duke Energy, is a leading
owner, operator and developer of integrated energy projects in Asia Pacific and
Latin America. DEI's diverse investment and asset portfolio spans the entire
energy value chain from exploration, production, gathering, processing and
transportation of natural gas through to generation, electric transmission and
energy trading and marketing.
Duke Energy (NYSE:DUK) is a global energy company with more than $26 billion in
assets. Headquartered in Charlotte, N.C., the company reaches into more than 50
countries, producing energy, transporting energy, marketing energy and providing
energy services. In the United States, Duke Energy companies provide electric
service to approximately two million customers in North Carolina and South
Carolina; operate interstate pipelines that deliver natural gas to various
regions of the country; and are leading marketers of electricity, natural gas
and natural gas liquids. Additional information about the company is available
on the Internet at: www.duke-energy.com
This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although Duke Energy believes that its expectations are
based on reasonable assumptions, it can give no assurance that its goals will be
achieved. Important factors that could cause actual results to differ materially
from those in the forward-looking statements herein include regulatory
developments, the timing and extent of changes in commodity prices for oil, gas,
coal, electricity and interest rates, the extent of success in connecting
natural gas supplies to gathering and processing systems and in connecting and
expanding gas and electric markets, the performance of electric generation,
pipeline and gas processing facilities, the timing and success of efforts to
develop domestic and international power, pipeline, gathering, processing and
other infrastructure projects and conditions of the capital markets and equity
markets during the periods covered by the forward-looking statements.
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Duke Energy to Purchase Dominion Resources Inc.'s
Latin American Power Generation Portfolio
Fact Sheet
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The Dominion Resource Inc.'s businesses being purchased by Duke Energy
International have gross ownership interests totaling approximately 1,200
megawatts of gross generation capacity and operations in hydroelectric, natural
gas and diesel facilities:
ARGENTINA
|X|54 percent of the 98-megawatt, natural gas-fired Alto Valle power station.
Co-owners of the business are the station's employees, with a 10-percent
interest, and CALF, a local electric utility cooperative, with a 36-percent
interest.
|X|98 percent of the 450-megawatt Cerros Colorados hydroelectric station.
Co-owners of the business are the facility's employees, with a 2-percent
interest.
BOLIVIA
|X|50-percent controlling interest in the 126-megawatt Empresa Electrica Corani
hydroelectric business. 47 percent of the business is held in two private
pension funds for the people of Bolivia, and the balance is held by
individual shareholders, including employees.
PERU
|X|30-percent joint controlling ownership interest in Empresa de Generacion
Electrica NorPeru S.A. [Egenor], with current capacity of 423 megawatts,
principally hydroelectric power, with some thermal generation capacity. The
business is scheduled to have 520 megawatts of capacity when an expansion
program is completed later this year. Co-owners include Gener, a Chilean
electric generation company, with a 30-percent interest, Electroperu with a
30-percent interest, and a 10-percent interest held by more than 700 public
shareholders.
BELIZE
|X|95 percent of the 25-megawatt Mollejon hydroelectric facility, Belize. The
remaining 5 percent of the business is owned by the Social Security
Administration of Belize.
