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20 April 2006 - International Power subsidiary, American National Power, has today agreed to acquire the 632 MW coal fired Coleto Creek Power generation facility in Texas from Topaz Power Group for a total cash consideration of $1.14bn.
Topaz Power Group, is a joint venture between Carlyle/Riverstone and Sempra Generation (a subsidiary of Sempra Energy),
Philip Cox, CEO of International Power, said, "Coleto Creek Power is one of the lowest cost generators in Texas and provides fuel diversity to our existing 3000 MW portfolio of gas fired CCGT generation in Texas. The output of the station is largely contracted and the acquisition will be immediately earnings and cash flow enhancing."
Coleto Creek Power is a 632 MW pulverized coal fired generation plant commissioned in 1980 and located in Goliad County, Texas, which is within the South Zone of the ERCOT market. Coal for the plant is sourced from the Powder River Basin, and is delivered to the plant by rail. Existing, multi-year contracts are in place for coal supply and rail transportation.
The majority of the plant's output is forward contracted to 2009. Additional forward contracts have been agreed and will be put in place through to 2013 for approximately 50 per cent of the plant's output. The credit support required for these forward hedging arrangements will be provided within the financing facility.
The acquisition of the plant will be 75 per cent funded by project non-recourse debt. The investment by International Power will be $288m and will be funded from current liquid resources. The remaining consideration ($852m), together with working capital requirements will be funded by a fully underwritten non-recourse debt facility of $935m. The acquisition is subject to regulatory approval and expected to complete in the third quarter of 2006
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