Former White House budget director Richard G. Darman is in line to become chairman of AES Corp. as the Arlington-based global energy company's board remakes itself after a recent financial crisis.
Darman, a partner with the Carlyle Group, a D.C.-based private equity firm, will succeed AES co-founder and chairman Roger W. Sant in May, assuming board approval of the change. Sant, who returned to active duty with AES in 2001, leading efforts to remedy critical money-losing power operations in Brazil, will remain on the board as chairman emeritus.
AES also added former Internal Revenue Service commissioner Charles O. Rossotti to its board yesterday. Before heading the IRS, Rossotti was a co-founder and chairman of American Management Systems Inc., a business and technology consulting firm in Fairfax.
Darman, budget director in the first Bush administration and a former Wall Street executive, joined the AES board last summer, at the beginning of a management shake-up. In the past year, AES has added two other directors: Paul T. Hanrahan, a veteran AES executive who was named president and chief executive last June, and former World Bank managing director Sven Sandstrom.
Four current directors will not stand for reelection in May, the company said. They are AES co-founder and former chief executive Dennis W. Bakke; former energy secretary Hazel R. O'Leary; Frank Jungers, retired head of the Arabian American Oil Co.; and Thomas I. Unterberg, managing director of C.E. Unterberg, Towbin.
The makeover of the board followed changes AES had to make to avoid bankruptcy after a rapid expansion left it vulnerable to the collapse of energy prices in 2001 and upheavals in Latin American countries where AES is heavily invested. The company generates power in 33 countries.
In December, AES refinanced $2.1 billion in loans and debt, pushing off repayments until November 2004 and later.
The departing directors were central players in AES's dramatic global growth beginning in 1981, Sant said. But current challenges in energy markets require directors with strong business experience, he added. "In today's energy industry, AES must focus on execution of business fundamentals and improving its financial strength," Sant said.
AES shares closed at $3.20 on the New York Stock Exchange yesterday, up 16 cents.