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15 March 2004 - US power group Aquila, Inc. said Friday is had entered into a definitive agreement to sell its interests in 12 power plants to Teton Power Funding, LLC, an affiliate of ArcLight Capital Partners, LLC, for $300.9m, subject to pre- and post-closing adjustments. The sale is expected to be completed in the first quarter of 2004, and is subject to regulatory and third party approvals.
The power plant interests are a part of Aquila's residual energy merchant and trading organization. The plants are located in the states of California, Florida, Georgia, Maine, New York and Washington, as well as Jamaica, and represent a net ownership interest of 643 MW. Aquila's three uncontracted peaking power plants are not included in the sale. Aquila anticipates using the net proceeds from the transaction to reduce liabilities and strengthen the company's balance sheet.
"The completion of this transaction, together with the completion of the recently announced agreements to sell our Canadian and United Kingdom utility businesses, will provide Aquila with the liquidity to meet 2004 debt maturities and allow management to focus more of its attention on the company's core businesses," said Keith Stamm, Aquila's chief operating officer.
Lehman Brothers acted as exclusive financial advisor to Aquila in connection with the transaction.
Based in Kansas City, Mo., Aquila operates electricity and natural gas distribution networks serving customers in seven U.S. states and in Canada and the United Kingdom. The company also owns and operates power generation assets.
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