8-KMaterial AgreementsExhibits & Filings

AMEREN CORP 8-K Report, Material Agreement (Mar 28, 2012)

Filed March 28, 2012For Securities:AEE

Summary

Ameren Corporation, through its subsidiary Ameren Energy Generating Company (Genco), has entered into a significant put option agreement with another subsidiary, AmerenEnergy Resources Generating Company (AERG), on March 28, 2012. This agreement grants Genco the irrevocable option to sell its Grand Tower, Gibson City, and Elgin energy centers, along with related assets, to AERG. The sale price would be the greater of $100 million or the appraised fair market value, subject to potential penalties if the closing is delayed beyond 90 days from the asset purchase agreement execution. This transaction is strategically important as Genco is entering into this agreement to secure an additional source of liquidity, which is a key consideration for investors assessing the company's financial flexibility and operational management. The put option period extends up to March 28, 2014, with potential for annual extensions. Furthermore, Ameren Corporation itself has provided a guaranty for AERG's payment obligations, indicating a strong commitment from the parent company to facilitate this internal transaction and potentially backstop the financial terms.

Key Highlights

  • 1Ameren subsidiary Genco granted an irrevocable put option to sell three energy centers (Grand Tower, Gibson City, Elgin) and related assets to another subsidiary, AERG.
  • 2The sale price will be the greater of $100 million or the fair market value determined by third-party appraisers.
  • 3Genco has the option to exercise this put option anytime between March 28, 2012, and March 28, 2014, with potential for annual extensions.
  • 4Penalties may apply if the sale closing does not occur within 90 days of the asset purchase agreement execution.
  • 5Genco paid $2.5 million to AERG for entering into the put option agreement.
  • 6AERG is required to pay a $100 million down payment within one business day of Genco exercising the put option.
  • 7Ameren Corporation has provided a written guaranty for AERG's payment obligations under the agreement, providing financial backing.

Frequently Asked Questions

Ameren Energy Generating Company (Genco) is entering into this put option agreement to provide an additional source of liquidity, if needed in the future. This suggests a proactive approach to managing financial resources and ensuring operational flexibility.

Ameren Corporation has provided a guaranty for AERG's payment obligations, meaning the parent company is backing the transaction. If Genco exercises the put option and AERG defaults, Ameren would be on the hook for AERG's obligations up to the purchase price. This also involves a $100 million down payment from AERG to Genco, which could bolster Genco's liquidity.

Genco can exercise the put option anytime between March 28, 2012, and March 28, 2014, with options for annual extensions. If exercised, the related asset purchase agreement is to be executed within fifteen business days, and the closing is subject to regulatory approvals. Penalties may apply if the sale does not close within 90 days of the asset purchase agreement's execution.

If the sale of the Put Option Assets does not close within one year of the Put Option Closing Date (and is not extended) and Genco fails to refund the down payment, Genco will be required to initiate an expedited sale process to a third party. AERG would be entitled to receive proceeds up to the amount of the down payment not previously refunded.