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JACKSON, Mich., July 3, 2003 -- CMS Energy and its partners have reached a conditional agreement to sell the 2,000-MW Loy Yang power plant and adjacent coal mine in Australia to an international consortium for about $3.5 billion Australian (approximately $2.4 billion in U.S. dollars), including $165 million Australian for the project equity.
CMS Energy owns 49.6 percent of the Loy Yang project. NRG Energy Inc. and Horizon Energy Australia Investments each own approximately a 25 percent share. Net proceeds to CMS Energy for its equity share are subject to closing adjustments and transaction costs.
The Great Energy Alliance Corporation (GEAC) was formed earlier this year by the Australian Gas Light Company (AGL), the Tokyo Electric Power Company, Inc. (TEPCO), and a group of financial investors led by the Commonwealth Bank of Australia to explore the possible acquisition of Loy Yang.
The conditions to completion of the sale include consents from Loy Yang's financiers to a restructuring of the project's debt, satisfactory resolution of regulatory issues and approvals, rulings on tax and stamp duty obligations, as well as approvals from the investors in Horizon Energy and the creditors committee of NRG Energy.
The sales agreement guarantees GEAC a period of exclusivity while the conditions of the purchase are satisfied. The signing of the agreement allows GEAC to begin discussions with Loy Yang's financiers to pursue a debt restructuring.
The brown coal-fired plant is the largest generator in Victoria, Australia, accounting for about 24 percent of the state's electricity generation. The CMS-led partnership bought the complex for $3.8 billion in 1997 as Australia privatized its electric industry.
CMS Energy is an integrated energy company, which has as its primary business operations an electric and natural gas utility, natural gas pipeline systems and independent power generation.
For more information on CMS Energy, please visit: www.cmsenergy.com
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