Entergy Subsidiary Sells Natural-Gas Fired Plant For $490 Million
by October 8, 2015 5:35 pm 174 views
New Orleans-based Entergy Corp., parent company of Entergy Arkansas Inc., announced Thursday (Oct. 8) that its wholesale generation division has agreed to sell its full stake in a 583-megawatt Rhode Island State Energy Center (RISEC) to a Washington, D.C.-based global asset manager for nearly $500 million.
Entergy Wholesale Commodities said it has agreed to sell its Johnson, R.I.-based natural gas-fired, combined-cycle generating plant to Carlyle Power Partners at a base price of $490 million, subject to closing adjustments. Entergy originally purchased the East Coast power plant for $346 million in December 2011. It entered into commercial service in 2002, officials said.
“Our strategy for EWC is focused on being disciplined about reducing risk and freeing up financial resources for other opportunities,” said Entergy Chairman and CEO Leo Denault. “RISEC has been a very good investment for us, and its sale is consistent with that strategy.”
Carlyle said the purchase agreement is inclusive of working capital and subject to certain purchase price adjustments. Equity capital for the transaction will come from Carlyle Power Partners II L.P and Carlyle Power Opportunities Capital Partners L.P., company officials said.
The Rhode Island power plant entered into commercial service in 2002. Carlyle officials said it is located near some of New England’s largest demand centers, and participates in the region’s deregulated wholesale power market. The acquisition increases the size of Carlyle’s power generation portfolio to 18 power plants totaling more than 4,900 gross megawatts, company officials said.
Entergy Wholesale Commodities said it expects to record a net gain of approximately $0.50 per share assuming closing of the sale occurs in the fourth quarter 2015, subject to working capital and other adjustments. The gain on sale will be classified as a special item, and as such, excluded from operational earnings.
The deal is contingent upon, among other things, obtaining necessary regulatory approval from the Federal Energy Regulatory Commission and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Closing is targeted for the end of 2015.
Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including nearly 10,000 megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy, which has revenues of $12 billion and 13,000 employees, delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas.
The Carlyle Group is a global alternative asset manager with $193 billion of assets under management across 128 funds and 159 fund of funds vehicles as of June 30, 2015. Carlyle has expertise in various industries, including aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, telecommunications & media and transportation.