AEP To Sell Four Power Plants To Blackstone And ArcLight JV For $2.17 Bln

(RTTNews) - American Electric Power (AEP) said it has signed an agreement to sell four competitive power plants totaling about 5,200 megawatts (MW) for approximately $2.17 billion to a newly formed joint venture of Blackstone (BX) and ArcLight Capital Partners LLC.

The sale agreement includes:Lawrenceburg Generating Station, 1,186 MW natural gas, Lawrenceburg, Indiana; Waterford Energy Center, 840 MW natural gas, Waterford, Ohio; Darby Generating Station, 507 MW natural gas, Mount Sterling, Ohio; Gen. James M. Gavin Plant, 2,665 MW coal, Cheshire, Ohio.

The sale is expected to close in the first quarter of 2017. AEP expects to net approximately $1.2 billion in cash after taxes, repayment of debt associated with these assets and transaction fees. The company is evaluating options and will share details about its plans for investment of the proceeds from this transaction at an analyst day November 1. These plans may involve reinvestment in its regulated businesses, including transmission; renewable projects; additional debt retirement; and share buybacks.

AEP expects to record an after-tax gain of approximately $140 million from the sale, subject to inventory true-ups, income tax and other adjustments.

The sale is subject to regulatory approvals from the Federal Energy Regulatory Commission, the Indiana Utility Regulatory Commission and federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976