HOUSTON - Calpine Corp 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.

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 transaction are directly encumbered with project debt. Therefore, the transaction is expected to result in net cash proceeds of approximately $1.53 billion, which the company intends to allocate in a balanced manner that maintains leverage neutrality and is accretive to Adjusted Free Cash Flow Per Share.

The six assets included in the transaction represent an aggregate capacity of 3,498 MW of combined-cycle generation resources. The divestiture of these assets will better align Calpine's 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. (particularly the Mid-Atlantic). 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 will continue to pursue opportunities to monetize the value of these assets through contract or sale, consistent with its strategic objectives.

Along with the power plants and related assets, the transaction also includes the sale of customary parts and services. The transaction is expected to close in the second quarter of 2014, pending receipt of necessary regulatory approvals and third-party consents.

Source: http://phx.corporate-ir.net/phoenix.zhtml?c=103361&p=irol-newsArticle&ID=1919977&highlight=
Associated URL: http://www.calpine.com/