Mirant Corporation announced January 16 that it has entered into a definitive purchase and sale agreement with LS Power Equity Partners, a member of the LS Power Group, for the sale of six U.S. natural gas fired plants for a purchase price of $1.407 billion, which includes estimated working capital. The net proceeds to Mirant from the sale after extinguishing $83 million of project-level debt are expected to be $1.324 billion. The company does not expect to recognize any significant tax or book gain on the transaction. The U.S. plants being sold are the following: Zeeland, Mich. (903 megawatts); West Georgia in Thomaston, Ga. (613 MW); Shady Hills in Pasco County, Fla. (469 MW); Sugar Creek in West Terre Haute, Ind. (561 MW); Bosque in Dallas-Fort Worth (546 MW); and Apex in Las Vegas (527 MW), constituting a total of 3,619 MW. The transaction is expected to close by the second quarter of 2007 after the satisfaction of certain customary conditions to closing.
"Although these plants do not fit within our business strategy, they are excellent facilities," said Edward R. Muller, chairman and CEO of Mirant Corporation. "We wish LS Power great success with them."
As previously announced, Mirant plans to continue returning cash to its shareholders upon completion of its planned asset and business sales. The amount of cash returned will be determined based on the outlook for the continuing business: 1) to preserve the credit profile of the continuing business; 2) to maintain adequate liquidity for expected cash requirements including, among other things, capital expenditures for the continuing business; and, (3) to retain sufficient working capital to manage fluctuations in commodity prices. Proceeds from the sales of the Zeeland and Bosque plants, expected to be approximately $500 million, will be reinvested in Mirant North America, a subsidiary of Mirant Americas Generation, and/or used to retire debt at Mirant North America.
Mirant is a competitive energy company that produces and sells electricity in the United States, the Caribbean and the Philippines. Mirant owns or leases approximately 17,300 megawatts of electric generating capacity globally. The company operates an asset management and energy marketing organization from its headquarters in Atlanta.
LS Power was founded in 1990 and is a fully integrated development, investment and asset management group of companies focused on the power industry. LS Power maintains offices in New York, New Jersey, Missouri, California, Florida and Massachusetts.
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