NEWARK, N.J., Jan. 13, 2011 /PRNewswire/ -- PSEG Power, a
subsidiary of Public Service Enterprise Group (PSEG) (NYSE: PEG),
today announced that it has agreed to the sale of its Texas generating assets. The assets
consist of two 1,000 megawatt gas-fired combined cycle generating
units that will be sold in two separate transactions. The
Odessa facility in west Texas will
be sold, pursuant to an asset purchase agreement, to High Plains
Diversified Energy Corporation (HPDEC), a municipal utility group
based in West Texas. MinnTex
Power Holdings LLC (MinnTex), an entity managed by Wayzata
Investment Partners LLC, has agreed to acquire 100% of the equity
interests in the limited partnership that owns the Guadalupe
facility in south Texas.
The transactions have a combined equity value of $687 million, or $343 per Kw. There is no debt attached to
the assets. "These units are efficient, well-run assets, and
there was substantial interest," said Caroline Dorsa, Executive Vice President and
Chief Financial Officer of PSEG. Cash received from the sale
will be used for general corporate purposes.
PSEG Power will account for the Texas assets as discontinued in 2010. Any gain
on the sale will also be reported in Discontinued Operations in
2011. The Texas assets generated 7.3 TWh in 2010. Earnings
from discontinued operations in 2010 are expected to be
$0.01 per share. This figure reflects
operating earnings from the Texas
assets of $0.03 per share offset by a
Mark-to-Market loss of $0.02 per
share.
The sales are expected to close during the first half of 2011
and are subject to customary regulatory approvals. Under the
terms of the definitive sales agreement for the Odessa facility, HPDEC will pursue financing
to complete the transaction through the sale of municipal bonds.
The sale of the Guadalupe facility to MinnTex is not subject
to any financing contingencies.
Goldman Sachs acted as exclusive financial advisor to PSEG Power
in connection with the transaction.
Public Service Enterprise Group (NYSE: PEG) is a publicly
traded diversified energy company with annual revenues of more than
$12 billion, and three principal
subsidiaries: PSEG Power, Public Service Electric and Gas Company
(PSE&G) and PSEG Energy Holdings.
FORWARD-LOOKING STATEMENT
The statements contained in this communication about our and our
subsidiaries' future performance, including, without limitation,
future revenues, earnings, strategies, prospects, consequences and
all other statements that are not purely historical, are
forward-looking statements for purposes of the safe harbor
provisions under The Private Securities Litigation Reform Act of
1995. Although we believe that our expectations are based on
reasonable assumptions, we can give no assurance they will be
achieved. There are a number of risks and uncertainties that could
cause actual results to differ materially from what may actually
occur. A discussion of some of these risks and uncertainties is
contained in our Annual Report on Form 10-K and subsequent reports
on Form 10-Q and Form 8-K filed with the Securities and Exchange
Commission (SEC). These documents address in further detail our
business, industry issues and other factors that could cause actual
results to differ materially from those indicated in this
communication. Forward looking statements made in this
communication only apply as of this date. While we may elect to
update forward-looking statements from time to time, we
specifically disclaim any obligation to do so, even if our internal
estimates change, unless otherwise required by applicable
securities laws.
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SOURCE PSEG Power