- $2.8 Billion cash proceeds1
- $7.0 Billion of debt to be
removed2
- Revising asset sale cash proceeds
target to approximately $3.2 Billion
- NRG investor conference call and
webcast today at 8:30 a.m. Eastern
“Today’s announcement represents a significant milestone in
simplifying our value proposition, optimizing our portfolio, and
strengthening our balance sheet to create significant shareholder
value,” said Mauricio Gutierrez, President and Chief Executive
Officer, NRG. “These sale processes were rigorous and highly
competitive. I am pleased with the outcome and confident in our
ability to work with our counterparties to bring these transactions
to a swift close.”
NRG Sells Ownership in NRG Yield and Renewable
Platform
NRG Energy, Inc. (NYSE: NRG) and Global Infrastructure Partners
(GIP) have entered into a Purchase Agreement for GIP to purchase
NRG’s ownership in NRG Yield and NRG’s Renewables Platform for cash
proceeds of $1.375 billion, subject to certain adjustments.
The purchase and sale agreement includes the sale of NRG’s
ownership in NRG Yield’s Class B and Class D shares, NRG’s
renewable energy development and operations platforms, NRG’s
renewable energy non-ROFO (Right of First Offer) backlog and
pipeline, and the NRG ROFO updated pipeline, with the exception of
four assets which are addressed in separate agreements as further
detailed below.
The transaction is expected to close in the second half of the
year and is subject to various customary closing conditions,
approvals and consents, including: Federal Energy Regulatory
Commission (FERC); California Public Utility Commission (CPUC);
Connecticut Public Utilities Regulatory Authority (CT PURA);
Department of Energy (DOE); Pennsylvania Public Utilities Authority
(PAPUC); and antitrust review under Hart-Scott-Rodino. The
transaction is not subject to shareholder approval.
The sale of NRG’s Renewables Platform and NRG’s interest in NRG
Yield does not impact NRG’s commitment to provide comprehensive
energy solutions for corporate and residential customers.
NRG ROFO and Accelerated Drop Downs to NRG Yield
NRG and NRG Yield entered into Purchase and Sale Agreements for
NRG Yield to purchase NRG’s interest in the following ROFO pipeline
assets: 527 MW Carlsbad Energy Center and 154 MW Buckthorn Solar
for additional cash proceeds of $407 million, subject to certain
adjustments.
The Carlsbad Energy Center and Buckthorn Solar drop downs are
expected to close before year-end and are subject to both projects
achieving commercial operations status as well as various customary
closing conditions and approvals.
As part of the sale of NRG’s interest in NRG Yield, NRG and NRG
Yield agreed to maintain a ROFO agreement for NRG’s remaining 102
net MW ownership in Agua Caliente, and also amended the ROFO
agreement to remove Ivanpah as a ROFO asset.
NRG Sells South Central Business
NRG and Cleco Corporate Holdings LLC (Cleco) entered into a
Purchase and Sale Agreement for Cleco to purchase NRG’s South
Central business for a total purchase price and cash proceeds of
$1.0 billion, subject to certain adjustments.
The South Central business owns and operates a 3,555 MW
portfolio of generation assets consisting of 225 MW Bayou Cove, 430
MW Big Cajun-I, 1,461 MW Big Cajun-II, 1,263 MW Cottonwood and 176
MW Sterlington, and serves a customer base of cooperatives,
municipalities and regional utilities under load contracts.
As part of the transaction, NRG is further optimizing value
through entering into a sale leaseback agreement for its 1,263 MW
Cottonwood plant, a highly efficient CCGT natural gas-fired
combined cycle plant, through May 2025.
The transaction is expected to close in the second half of the
year and is subject to various customary closing conditions,
approvals and consents; including: Federal Energy Regulatory
Commission (FERC); Louisiana Public Service Commission (LPSC);
Committee on Foreign Investment in the United States (CFIUS); and
antitrust review under Hart-Scott-Rodino.
NRG Revises Asset Sale Cash Proceeds Target
Today’s announcement brings NRG’s cumulative Transformation Plan
asset sales to $2.9 billion in anticipated cash proceeds, including
approximately $150 million3 of asset monetization closed in the
second half of 2017. NRG expects to announce additional asset sales
over the course of 2018 and is revising its total asset sales cash
proceeds target to approximately $3.2 billion.
NRG to Host Investor Conference Call and Webcast
NRG plans to host an investor conference call and webcast at
8:30 a.m. Eastern today. A live webcast of the conference call,
including presentation materials, can be accessed through NRG’s
website at http://www.nrg.com and clicking on “Webcasts &
Presentations” under the “Investors” section at the bottom of the
home page. The webcast will be archived on the site for those
unable to listen in real time.
Advisors
Citi is serving as lead financial advisor on the sale of NRG
Yield and Renewables, alongside Goldman Sachs and Morgan Stanley as
co-financial advisors. Jones Day is serving as legal advisor.
Goldman Sachs and Morgan Stanley are serving as co-lead
financial advisors on the sale of South Central, alongside Citi as
co-financial advisor. Jones Day is serving as legal advisor.
About NRG
NRG is the leading integrated power company in the U.S., built
on the strength of our diverse competitive electric generation
portfolio and leading retail electricity platform. A Fortune 500
company, NRG creates value through best in class operations,
reliable and efficient electric generation, and a retail platform
serving residential and commercial businesses. Working with
electricity customers, large and small, we implement sustainable
solutions for producing and managing energy, developing smarter
energy choices and delivering exceptional service as our retail
electricity providers serve almost three million residential and
commercial customers throughout the country. More information is
available at www.nrg.com. Connect with NRG Energy on Facebook
and follow us on Twitter @nrgenergy.
Safe Harbor
In addition to historical information, the information presented
in this press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act. These statements involve
estimates, expectations, projections, goals, assumptions, known and
unknown risks and uncertainties and can typically be identified by
terminology such as “may,” “should,” “could,” “objective,”
“projection,” “forecast,” “goal,” “guidance,” “outlook,” “expect,”
“intend,” “seek,” “plan,” “think,” “anticipate,” “estimate,”
“predict,” “target,” “potential” or “continue” or the negative of
these terms or other comparable terminology. Such forward-looking
statements include, but are not limited to, statements about the
Company’s future revenues, income, indebtedness, capital structure,
plans, expectations, objectives, projected financial performance
and/or business results and other future events, anticipated
benefits or costs of acquisitions or divestitures, and views of
economic and market conditions.
Although NRG believes that its expectations are reasonable, it
can give no assurance that these expectations will prove to be
correct, and actual results may vary materially. Factors that could
cause actual results to differ materially from those contemplated
herein include, among others, general economic conditions, hazards
customary in the power industry, weather conditions, competition in
wholesale power markets, the volatility of energy and fuel prices,
failure of customers to perform under contracts, changes in the
wholesale power markets, changes in government regulations, the
condition of capital markets generally, our ability to access
capital markets, unanticipated outages at our generation
facilities, adverse results in current and future litigation,
failure to identify, execute or successfully implement
acquisitions, repowerings or asset sales, our ability to implement
value enhancing improvements to plant operations and companywide
processes, our ability to implement and execute on our publicly
announced transformation plan, including any cost savings, margin
enhancement, asset sale, and net debt targets, our ability to
proceed with projects under development or the inability to
complete the construction of such projects on schedule or within
budget, risks related to project siting, financing, construction,
permitting, government approvals and the negotiation of project
development agreements, our ability to progress development
pipeline projects, the timing or completion of GenOn's emergence
from bankruptcy, the inability to maintain or create successful
partnering relationships, our ability to operate our businesses
efficiently, our ability to retain retail customers, our ability to
realize value through our commercial operations strategy, the
ability to successfully integrate businesses of acquired companies,
our ability to realize anticipated benefits of transactions
(including expected cost savings and other synergies) or the risk
that anticipated benefits may take longer to realize than expected,
our ability to close the Drop Down transactions with NRG Yield, and
our ability to execute our Capital Allocation Plan. Debt and share
repurchases may be made from time to time subject to market
conditions and other factors, including as permitted by United
States securities laws. Furthermore, any common stock dividend is
subject to available capital and market conditions.
NRG undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. The adjusted
EBITDA and free cash flow guidance are estimates as of February 7,
2018. These estimates are based on assumptions the company believed
to be reasonable as of that date. NRG disclaims any current
intention to update such guidance, except as required by law. The
foregoing review of factors that could cause NRG’s actual results
to differ materially from those contemplated in the forward-looking
statements included in this press release should be considered in
connection with information regarding risks and uncertainties that
may affect NRG's future results included in NRG's filings with the
Securities and Exchange Commission at www.sec.gov.
1 Excludes transaction costs; subject to working capital and
other customary purchase price adjustments.
2 Debt as of 9/30/17.
3 Includes the drop down of TE Holdco (25%) and SPP to NYLD, and
the sale of MN Wind.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180207005630/en/
NRGMedia:Sheri Woodruff, 609-524-4608orMarijke
Shugrue, 609-524-5262orInvestors:Kevin L. Cole, CFA,
609-524-4526orLindsey Puchyr, 609-524-4527
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