Constellation Energy Group announced Wednesday that it is selling six of its power generating plants for $1.65 billion to Tenaska Power Fund, based in Omaha, Neb.
Angelique Rewers, a spokeswoman for Constellation Energy, said the company had announced in June that it was looking to sell the plants.
“We saw an opportunity in the market,” Rewers said, adding that the company was selling its natural gas-fired plants to focus on its coal-fired plants.
The Tenaska Power Fund is a private equity limited partnership formed by the managing directors and owners of Tenaska Energy, a utility company based in Omaha.
“This acquisition maintains our investment philosophy of focusing on quality facilities that are well positioned to serve key markets,” said Paul Smith, senior managing director of Tenaska Capital.
“The plants are clean, efficient and strategically located. The portfolio compliments our existing asset and enhances our market position,” Smith said.
The plants are: High Desert in Victorville, Calif., Rio Nogales in Seguin, Texas, Holland Energy in Shelby Co., Ill., Big Sandy in Neal, W.Va., University Park in Chicago and Wolf Hills in Bristol, Va.
The plants produce a total of 3,145 megawatts of electrical power.
Constellation Energy stated in a elease that it has gotten approval from proposed merger partner FPL Group in Florida for plant sale. The deal is expected to close before the end of 2006 or in early 2007.
“The transaction would be neutral to 2007 earnings,” the company stated. But it added that it expects in 2008 that “proceeds to be applied to the repurchase of debt and equity in proportions consistent with the company’s current balance sheet,” the company stated in its release.
But the company added that the funds will be used to reduce its debt and invest in the company business and the repurchase of shares.
Credit Suisse and Deutsche Bank advised Constellation Energy on the sale of the plants.
