Dynegy Reaches Agreement to Sell Three Power Generating Assets
July 11 2017 - 5:11PM
Business Wire
Dynegy Inc. (NYSE: DYN) has reached agreement to sell three of
its generating plants for approximately $300 million. Combined with
the previously announced LS Power transaction, a total of
approximately $780 million in aggregate sales proceeds will be used
primarily for debt reduction.
Lee Energy Facility
Dynegy reached an agreement to sell its Lee Energy Facility, a
625 MW (summer capacity rating) gas-fueled peaking asset in the PJM
ComEd region to an affiliate of Rockland Capital.
Dynegy will receive $180 million in cash and avoid the
incremental capital investment necessary to convert the plant to
dual fuel status in order to meet PJM capacity performance
obligations. The sale allows the Company to crystallize value in
the ComEd region and generate additional cash proceeds for debt
repayment.
Dighton and Milford Energy Facilities
Dynegy has also signed a purchase and sales agreement with
Starwood Energy Group Global for two assets totaling $119 million.
The combined 310 MW (summer rating) of assets to be sold include
two intermediate gas-fueled plants located in Dighton and Milford,
Massachusetts. The Company anticipates allocating the cash proceeds
to debt reduction.
The agreement fulfills the mitigation plan approved by the
Federal Energy Regulatory Commission (FERC) regarding the Company’s
purchase of ENGIE’s US-based asset portfolio. In its December 22,
2016 order, FERC found competitive concerns with respect to the
capacity markets in the ComEd Locational Delivery Area (LDA) in PJM
and the Southeastern New England (SENE) capacity zone in ISO-NE.
Dynegy submitted a mitigation plan to address FERC’s concerns that
called for an agreement to sell capacity in SENE within six months
of closing.
Barclays served as lead financial advisor and Deutsche Bank
served as advisor on the Dighton and Milford transactions. The
transactions are subject to customary regulatory approvals.
About Dynegy
At Dynegy, we generate more than just power for our
customers. We are committed to being a leader in the electricity
sector. Throughout the Northeast, Mid-Atlantic, Midwest and Texas,
Dynegy operates power generating facilities capable of
producing 28,000 megawatts of electricity—or enough energy to power
more than 22 million American homes. We’re proud of what we do, but
it’s about much more than just output. We’re always striving to
generate power safely and responsibly for our wholesale and retail
electricity customers who depend on that energy to grow and
thrive.
Forward-Looking Statements
This news release contains statements reflecting assumptions,
expectations, projections, intentions or beliefs about future
events that are intended as “forward-looking statements,”
particularly those statements concerning the agreed upon sales of
Dynegy’s Lee, Dighton and Milford Energy Facilities, Dynegy’s value
in the ComEd region, generation of proceeds for debt repayment, and
receipt of regulatory approvals. Discussion of risks and
uncertainties that could cause actual results to differ materially
from current projections, forecasts, estimates and expectations of
Dynegy is contained in Dynegy’s filings with the Securities and
Exchange Commission (the SEC). Specifically, Dynegy makes reference
to, and incorporates herein by reference, the section entitled
“Risk Factors” in its 2016 Form 10-K and subsequent Form 10-Qs. In
addition to the risks and uncertainties set forth in Dynegy’s SEC
filings, the forward-looking statements described in this press
release could be affected by, among other things, (i) Dynegy’s
ability to close the transactions on the terms it currently
contemplates, or that Dynegy will realize the expected benefits
from the transactions; and (ii) Dynegy may be unable to obtain
regulatory approvals required for the transactions, or required
regulatory approvals may delay such sales or result in the
imposition of conditions that could have a material adverse effect
on Dynegy or cause the companies to abandon such sales. Any or all
of Dynegy’s forward-looking statements may turn out to be wrong.
They can be affected by inaccurate assumptions or by known or
unknown risks, uncertainties, and other factors, many of which are
beyond Dynegy’s control.
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version on businesswire.com: http://www.businesswire.com/news/home/20170711006624/en/
Dynegy Inc.Media: Julius Cox, 713-767-5800orAnalysts:
713-507-6466
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