actually less than 5% of revenues and about 2.25% of assets were located in Argentina as of 12/31/07; as per '07 10-k. I don't know how well capitalized the Argentina subs are, but I assume AES tries to maintain minimum equity in those subs. In any event I think the actual exposure is very limited, and I would take the Argentina govt. "fraud" allegation with a grain of salt.
Argentina has pretty much been a disappointment if not an outright disaster for AES for the past five years. Relations between AES and the governments there have been poor, so the allowed returns have been close to confiscatory. That is why AES has moved to minimize the amount of equity it is leaving in Argentina, and it is what Argentina is complaining about. If they gave reasonable treatment to AES, they would have a better capital structure than they have. AES is not by any means completely at fault here. I don't think the market gives us any value at all for Agentina; the country itself is also a mess. If the company were to announce tomorrow that it is giving all the assets back to the government, I don't think it would take the stock much lower than it already is. The episode highlights the merits of AES's practice of trying to engage local partners and keep local business in local currencies. I don't believe there is much US financial exposure to the debt in Argentia. I hope that is the case.