Calpine To Sell Six Southeast Power Plants To LS Power For $1.57 Bln

(RTTNews) - Wholesale power generation company Calpine Corp. (CPN) said Friday that it has agreed to sell six power plants in its Southeast region to LS Power for $1.57 billion in cash, subject to working capital and other adjustments.

The portfolio of assets comprises 3,498 MW of combined-cycle generation capacity in Oklahoma, Louisiana, Alabama, Florida and South Carolina.

The deal is expected to close in the second quarter of 2014.

Calpine expects to utilize existing federal and state net operating losses to almost entirely offset the projected taxable gains from the sale. In addition, none of the assets included in the deal are directly encumbered with project debt.

As a result, the deal is expected to result in net cash proceeds of about $1.53 billion, which the company plans to allocate in a balanced manner that maintains leverage neutrality and is accretive to adjusted free cash flow per share.

Calpine noted that the divestiture will better align its asset base with its strategic focus on competitive wholesale power markets, most notably those in its core regions: the Western U.S., particularly California, Texas and the Eastern U.S.

Following the close of the sale, Calpine will retain ownership of four natural gas-fired power plants located in the Southeast totaling 1,738 MW in Arkansas, Alabama and Florida.

The company said it will continue to pursue opportunities to monetize the value of those assets through contract or sale, consistent with its strategic objectives.