EXHIBIT 99.1
ITALY'S ENEL TO ACQUIRE U.S.-BASED CHI ENERGY
ACQUISITION REPRESENTS ENEL'S ENTRY INTO NORTH AMERICAN MARKET
Rome, Italy, November 1, 2000 - Enel S.p.A. [MIB:ENEL, DAX:ENL, NYSE:EN]
("Enel"), through its wholly owned subsidiary Erga S.p.A ("Erga"), today
announced a definitive merger agreement to acquire CHI Energy, Inc. ("CHI") of
Stamford, Connecticut, a leading owner, operator and developer of renewable
power projects in North America, for $170 million in cash. Major investors in
CHI include Morgan Stanley & Co., Inc. and UBS AG, London Branch. Under the
terms of the agreement, approximately $142 million in CHI debt will remain
outstanding.
This acquisition, Enel's first in the United States, complements the company's
strategy for worldwide growth in its core electric business and creates
additional expansion opportunities throughout North America and Latin America.
Enel is the world's largest publicly listed electric utility with 29 million
customers and a current generating capacity of 56,000 megawatts (MW). In 1999,
Enel established Erga as a wholly owned subsidiary to grow its existing set of
competencies and assets in the renewable energy segment of its business. With
this acquisition, Erga becomes the world's largest company dedicated exclusively
to renewable energy. Erga already owns 30 geothermal plants, 273 hydroelectric
plants, four wind farms and three photovoltaic plants and a generating capacity
of about 1,700 MW. Erga has also committed $800 million to expand its capacity
in Italy. With this acquisition, Erga will have 389 power plants and a combined
generating capacity of approximately 2,000 MW.
Chicco Testa, chairman of Enel, said, "Enel's acquisition of CHI is a
significant achievement for our company. As a global multi-service provider, it
is critical that we expand our geographic footprint in renewable energy and
broaden our assets and skills mix. This transaction leverages Enel's strong core
capabilities in plant operation and maintenance and will provide a platform to
capture the robust growth opportunities that exist in the North American and
Latin American markets. Working together with CHI, and building on their
established relationships with suppliers, customers and communities, we will set
new standards for renewable energy."
Paolo Pietrogrande, chief executive officer of Erga, said, "This acquisition
will enable Enel to establish a beachhead for future growth in renewable energy
markets throughout the United States, Canada and Latin America. Deregulation,
environmental awareness and volatile oil prices are all contributing to the
accelerating interest in renewable energy sources. In the United States alone,
we have seen a dramatic increase in green power over the past few years.
Twenty-two states now offer their customers the opportunity to purchase energy
from renewable sources, and twelve states have set specific standards regarding
the quantity of power sales that must come from renewables. In Canada, the
government has been particularly outspoken in its support of clean energy."
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"We believe CHI is the ideal partner to enable us to capitalize on these
opportunities. By harnessing the talent and experience that CHI's people bring
to our organization, we will be better positioned to compete in the evolving
energy marketplace. Together, we will be able to achieve results that we could
not have achieved on a stand-alone basis. Our technological and operational
expertise, coupled with CHI's project development strength, will fortify our
abilities for global expansion. We will also be able to leverage CHI's
experience in trading CO2 credits. This is a growing business in North America
and, in light of the Kyoto Conference protocol, we expect it to be an expanding
market in Europe as well," Mr. Pietrogrande concluded.
Edward M. Stern, president and chief executive officer of CHI said, "We are
delighted to become a part of the Enel family. This transaction brings together
two leading organizations, with complementary strengths, in the growing
renewable energy market. Erga, backed by Enel's global reach and financial
strength, offers a tremendous depth of resources and technical capabilities. CHI
has extensive transactional experience and knowledge of the North American
renewables market, as well as the ability to act quickly on new project
opportunities. Together, we will be able to offer broader capabilities to our
existing customers and project partners and also offer increased opportunities
to our employees. I am confident that the combination of Erga and CHI will play
a significant and dynamic part in support of Enel's growth and in meeting the
growing demand for cleaner energy."
Mr. Stern will remain president and chief executive officer of CHI. Charles F.
Goff, Jr., former chairman and chief executive officer of Destec Energy, Inc.,
will remain as chairman of CHI's board of directors. Michael J. Petrick of
Morgan Stanley will also remain on CHI's board. CHI's senior management team
will remain in their current positions. CHI will maintain its name and
headquarters in Stamford, Connecticut, and continue to manage its portfolio of
renewable energy facilities in operation, under construction, and in
development.
The transaction is conditioned upon approval from the Department of Justice
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Lazard acted as financial advisor to Enel, and Skadden, Arps, Slate, Meagher &
Flom LLP acted as legal counsel to Enel. Morgan Stanley Dean Witter acted as
financial advisor to CHI Energy, and Weil, Gotshal & Manges LLP acted as legal
counsel.
ABOUT CHI ENERGY
CHI Energy, Inc., headquartered in Stamford, CT, owns and manages a portfolio of
renewable energy projects across the United States and Canada with a total
generating capacity of 254 MW, plus 53 MW under construction and other projects
under development. CHI's projects are located in 15 U.S. states and two Canadian
provinces, with concentrations in the northeastern, southeastern and western
United States and eastern Canada. CHI's diversified portfolio of renewable
energy projects includes hydropower, biomass, landfill gas, wind and other clean
energy generation technologies. Pending its acquisition by Erga, CHI's major
shareholders include Morgan Stanley & Co., Inc. and UBS AG, London Branch, which
hold approximately 39.7 percent and 34.5 percent, respectively, of CHI's common
equity.
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ABOUT ERGA
Erga is the wholly owned renewable energy subsidiary of Enel. Erga has a
generating capacity of 1,700 MW and produces approximately 7.5 billion KWh
annually. Erga's geothermal, small-hydro, wind and photovoltaic energy
generation is sufficient to supply the electricity needs of about 3.5 million
Italian homes. In addition to its focus on renewable energy, Erga provides
industrial repair and equipment upgrade services for Enel and for outside
customers. Erga's mission is to develop the business of energy generation from
renewable sources, maximizing its economic value through the efficient use of
power plants, the identification of new renewable sources, technological
development and the proficient use of its human, technical and financial
resources. Erga employs approximately 2,300 people.
ABOUT ENEL
Enel (MIB:ENEL, DAX:ENL, NYSE:EN) is the principal electricity company in Italy
and the largest traded electric utility worldwide with the leading position in
the generation, transmission, distribution and supply of electricity. The
company, with 1999 revenues in excess of L40,000 billion (approximately $20
billion) and 76,000 employees, serves more than 29 million customers. As of June
30, 2000, Enel has sold 103.3 TWh of electricity, with net installed capacity of
about 56,000 MW. Enel's most significant business outside its core electricity
operations is its 56.6 percent interest in WIND, a joint venture in the
telecommunications industry with France Telecom, and the recent acquisition of
Infostrada from Vodafone. The two companies will serve more than 12 million
costumers.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains forward looking statements within the meaning of the
"safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking statements
with respect to revenues, earnings, performance, strategies, prospects and other
aspects of the businesses of Enel S.p.A., Erga S.p.A. and CHI Energy, Inc. are
based on current beliefs as to the outcome and timing of future evens, and
actual results may differ materially from those projected or implied in the
forward looking statements. Further, certain forward looking statements are
based upon assumptions of future events which may not prove to be accurate. The
forward looking statements involve risks and uncertainties including, but not
limited to: changes in laws or regulations, changing governmental policies and
regulatory actions with respect to allowed rates of return including but not
limited to return on equity and equity ratio limits, industry and rate
structure, acquisition, disposal, depreciation and amortization of assets and
facilities, operation and construction of plant facilities, recovery of fuel and
purchased power costs, decommissioning costs, present or prospective wholesale
and retail competition, political and economic risks, changes in and compliance
with environmental and safety laws and policies, weather conditions (including
natural disasters such as hurricanes), population growth rates and demographic
patterns, competition for retail and wholesale customers, availability, pricing
and transportation of fuel and other energy commodities, market demand for
energy from plants or facilities, changes in tax rates or policies or in rates
of inflation or in accounting standards, unanticipated delays or changes in
costs for capital projects, unanticipated changes in operating expenses and
capital expenditures, capital market conditions, competition for new energy
development opportunities and legal and administrative proceedings (whether
civil, such as environmental, or criminal) and settlements and other factors.
Readers are referred to Enel S.p.A.'s and CHI Energy, Inc.'s most recent reports
filed with the Securities and Exchange Commission.
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CONTACTS FOR ENEL AND ERGA
Investors:
Luca Torchia
39-06-8509-3437
[email protected]
Media:
Costanza Esclapon
39-06-8509-5646
[email protected]
Joele Frank / Barrett Godsey
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
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