AKRON, Ohio, July 10, 2018 /PRNewswire/ -- FirstEnergy
Solutions Corp. ("FES") announced today that it has agreed to sell
its retail and wholesale load-serving business to Constellation, a
subsidiary of Exelon Corporation (NYSE: EXC), for a purchase price
of $140 million in cash, subject to
certain purchase price adjustments. FES has approximately 900,000
Commercial & Industrial and Residential customers in six states
in the Midwest and Mid-Atlantic, primarily Ohio and Pennsylvania and serves 41 terawatt-hours of
electricity load.
The transaction with Constellation does not include the transfer
of (i) FES cash collateral posted with various counterparties or
(ii) FES working capital. In total, FES expects to realize total
cash proceeds of approximately $280
million, subject to certain purchase price adjustments,
including the return of cash collateral and collection of retained
net working capital.
The sale will be accomplished pursuant to a court-supervised
Section 363 bankruptcy auction process. FES has filed a
motion with the Bankruptcy Court overseeing its chapter 11 cases
for approval of auction and bid procedures that will permit other
interested parties to submit competitive bids for the retail and
wholesale load serving business.
The sale is subject to receipt of other necessary approvals,
including Hart-Scott-Rodino. If approved, the companies expect to
close the transaction in the fourth quarter of 2018.
Throughout the sale process, FES will continue to supply energy
and service to all customers without interruption. "We believe this
transaction is another important step in our restructuring plan,"
said Kevin Warvell, Vice President
and Chief Financial Officer of FES. "If approved, we will work with
Constellation to ensure the transition of customer accounts is
seamless. During the sale process, our daily operations will
continue as usual, and we will continue to provide our customers
with the uninterrupted service they demand. Taking care of
customers is and will remain our number one priority."
"This agreement would provide an opportunity to grow our retail
business in strategically attractive markets where we're best
suited to match load served with Exelon generation assets," said
Mark Huston, President of
Constellation's National Retail Business. "FirstEnergy Solutions
has a reputation for delivering value to customers, and our
combined business would continue that tradition with a broad array
of energy products and services at competitive prices."
FES, its subsidiaries and FirstEnergy Nuclear Operating Company
on March 31, 2018, filed petitions
under Chapter 11 of the Federal Bankruptcy Code to facilitate an
orderly financial restructuring. The case is proceeding in U.S.
Bankruptcy Court for the Northern District of Ohio, in Akron. Additional information can be found at
https://cases.primeclerk.com/FES.
Akin Gump Strauss Hauer & Feld LLP is serving as legal
counsel and Lazard is serving as investment banker to FES with
respect to this sale and during FES's chapter 11 restructuring.
About Constellation
Constellation is a leading
competitive retail supplier of power, natural gas and energy
products and services for homes and businesses across the
continental United States.
Constellation's family of retail businesses serves approximately 2
million residential, public sector and business customers,
including more than two-thirds of the Fortune 100. Baltimore-based Constellation is a subsidiary
of Exelon Corporation (NYSE: EXC), the nation's leading competitive
energy provider, with 2017 revenues of approximately $33.5 billion. Learn more at
www.constellation.com or on Twitter at @ConstellationEG.
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SOURCE FirstEnergy Solutions