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1 October 2004 - Dynegy Inc. today announced that it has completed the sale of Decatur, Ill.-based Illinois Power Company to Ameren Corporation. The $2.3bn transaction included Ameren's assumption of $1.8bn of Illinois Power's debt and preferred stock, cash proceeds of $375m and an additional $100m of cash placed in escrow.
"The completion of this strategic and financial milestone -- a key element of the company's self-restructuring initiative that is in its latter stages -- further solidifies Dynegy's position as a leading energy company focused on the growth of our merchant power generation and natural gas liquids businesses," said Bruce A. Williamson, Chairman, President and Chief Executive Officer of Dynegy Inc. "In keeping with our goal of achieving an appropriate capital structure for our company, this transaction eliminates a significant amount of debt and dramatically reduces near-term maturities. In less than two years, we have lowered our debt level from almost $9bn to approximately $5.5bn projected for the end of 2004, while maintaining substantial cash and liquidity.
"We remain fully committed to the financial discipline and strong operational performance that have resulted in significant value-creation for our debt and equity holders," Williamson added. "In addition to adhering to these commitments, we will continue our focus on maximizing our performance and positioning Dynegy to capture even greater value for investors as the U.S. economy builds further momentum."
The transaction received the requisite regulatory approvals from the Federal Energy Regulatory Commission (FERC), the Illinois Commerce Commission and, most recently, the Securities and Exchange Commission. The FERC's approval order included the sale of Dynegy's 20 percent interest in the Joppa power generation facility in Joppa, Ill. to Ameren. In addition, the FERC approved a two-year power purchase agreement under which Illinois Power will annually purchase from Dynegy up to 2800 MW of capacity and 11.3 million megawatt-hours of energy through 2006 -- enough to serve approximately 70 percent of Illinois Power's customer demand. Substantially all of the capacity and energy will be provided by Dynegy's power generation facilities in Illinois.
As a result of the sale, nearly 1800 Illinois Power employees are now part of AmerenIP. Through its power generation business, Dynegy will continue to be one of the largest suppliers of energy to the state of Illinois. The company owns and operates nine power plants in Illinois totaling nearly 4000 megawatts of generating capacity. Dynegy's 2200-employee work force includes approximately 600 in Illinois.
Dynegy's 2004 guidance estimates assumed that the sale of Illinois Power would close as of Dec. 31, 2004. The company is evaluating guidance in light of the earlier than forecasted closing, as well as other matters relating to its anticipated financial performance for 2004. An update will be provided on October 28 when Dynegy announces third quarter 2004 results.
Dynegy Inc. provides electricity, natural gas and natural gas liquids to customers throughout the United States. Through its energy businesses, the company owns and operates a diverse portfolio of assets, including power plants totalling 11 885 MW of net generating capacity and gas processing plants that process approximately 1.8 billion cubic feet of natural gas per day.
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