Talen Energy Corporation TLN announced Thursday (10/8) that it has agreed to sell three Pennsylvania
power plants with a total combined generating capacity of 996 megawatts for
$1.51 billion in gross cash proceeds, subject to customary purchase price
adjustments.
The sale of the Ironwood combined-cycle, natural gas-fired plant, and the
separate sale of the Holtwood and Wallenpaupack hydroelectric projects, are
part of a requirement to divest certain assets in specific regions of the
PJM Interconnection, which include portions of eastern Pennsylvania, New
Jersey and Maryland, to comply with a December 2014 Federal Energy
Regulatory Commission order approving the transactions that formed Talen
Energy.
The 704-megawatt Ironwood plant is being sold to a subsidiary of TransCanada
Corporation (TSX, NYSE: TRP) (TransCanada) for a total purchase price of
$654 million, subject to customary purchase price adjustments. In connection
with the transaction, Talen Energy expects to repay approximately $42
million of indebtedness, plus a customary pre-payment premium, associated
with the facility.
The Holtwood and Lake Wallenpaupack hydroelectric projects, with a combined
generating capacity of 292 megawatts, are being sold to a subsidiary of
Brookfield Renewable Energy Partners L.P. for $860 million, subject to
customary purchase price adjustments.
"We have made substantial improvements during our ownership of Ironwood, and
appreciate the efforts of the dedicated employees who have operated and
maintained the plant very well. We are pleased that we will be conveying
ownership to TransCanada, a large and diversified energy company with
extensive plant operating experience," said Paul Farr, Talen Energy
President and Chief Executive Officer.
"Brookfield Renewable Energy Partners is an experienced owner and operator
of hydroelectric projects and has extensive operations across North America,
including the Safe Harbor hydroelectric project on the Susquehanna River
just upstream from Holtwood. We recognize and appreciate the dedicated
employees who operate, maintain and support the hydro plants. They have done
an outstanding job, and their skill and experience will prove invaluable to
Brookfield in continuing the legacy of operating excellence and citizenship
at both facilities," Farr said.
The transactions are expected to result in net proceeds of approximately
$1.16 billion. In the near term, Talen Energy plans to use proceeds of the
transactions to retire pre-payable and maturing debt.
Ironwood, Holtwood and Wallenpaupack would have been expected to contribute
Adjusted EBITDA and Adjusted Free Cash Flow on a full-year 2016 basis of
approximately $140 million and $80 million, respectively, and Net Income and
Cash from Operations on a full-year 2016 basis of approximately $56 million
and $101 million, respectively.
Both transactions are expected to close in the first quarter of 2016,
following the receipt of necessary regulatory approvals and other customary
closing conditions.
For the Ironwood transaction, Credit Suisse served as financial advisor to
Talen Energy and Kirkland & Ellis LLP was transaction counsel.
For the hydro transaction, RBC Capital Markets served as financial advisor
to Talen Energy and Simpson Thacher & Bartlett LLP was transaction counsel.
Talen Energy is one of the largest competitive energy and power generation
companies in North America. Our diverse generating fleet operates in
well-developed, structured wholesale power markets. To learn more about us,
visit www.talenenergy.com.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Posted In: NewsPress Releases
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in