Ameren Receives Approval From FERC To Divest Its Merchant Generation Business

(RTTNews) - Ameren Corp. (AEE) announced that it has received approval from the Federal Energy Regulatory Commission or FERC to divest its merchant generation business, Ameren Energy Resources Company, to an affiliate of Dynegy Inc. (DYN).

The company stated that FERC also approved the transfer of the Elgin, Grand Tower and Gibson City merchant gas-fired energy centers in Illinois, which were not part of the Dynegy transaction, from Ameren Energy Generating Company or Genco to Ameren Energy Medina Valley Cogen, LLC.

Following this approval, Medina Valley acquired these energy centers in accordance with the previously announced asset purchase agreement between Medina Valley and Genco, the company said.

Ameren noted that Medina Valley has entered into an agreement to sell the Elgin, Gibson City and Grand Tower gas-fired energy centers to a special purpose entity affiliated with and formed by Rockland Capital, a private equity firm with offices in Houston and New York. The closing is expected to occur by year-end 2013.

Also, in March 2013, Genco received an initial payment of $100 million for the sale of the three energy centers to Medina Valley. Following FERC approval, the energy centers were transferred to Medina Valley and Medina Valley paid Genco an additional $37.5 million in accordance with the terms of the amended put option agreement between Genco and Medina Valley, the company said.

Under the terms of the AER divestiture agreement, Genco would receive after-tax proceeds realized in excess of $137.5 million following the closing of the sale of the three energy centers by Medina Valley. Ameren expects that Medina Valley will, over the two-year period post-closing, realize after-tax sale proceeds in excess of $137.5 million, inclusive of funds held in escrow for two years to cover certain seller indemnification requirements.