8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+1

AMEREN CORP 8-K Report, Material Agreement (Dec 4, 2013)

Filed December 4, 2013For Securities:AEE

Summary

This Form 8-K filing by Ameren Corporation reports on the completion of its divestiture of its merchant generation business to Illinois Power Holdings, LLC (IPH), an indirect wholly owned subsidiary of Dynegy Inc., on December 2, 2013. The transaction involved the sale of all outstanding limited liability company interests in New Ameren Energy Resources LLC (New AER). A letter agreement amending the original transaction agreement was entered into on December 2, 2013, which requires Ameren to pay an additional $25 million to $35 million related to wholesale customer contracts and retain approximately $4 million in cash at Ameren Energy Marketing Company. Ameren will retain certain assets and liabilities, including pension and postretirement benefit obligations for its employees and the Meredosia and Hutsonville energy centers. The divestiture resulted in no cash proceeds for Ameren and is expected to lead to a charge to earnings, which will be reflected in the company's financial statements as a loss on discontinued operations. As a consequence of the divestiture, Steven R. Sullivan, Chairman, President and CEO of AER, is no longer an executive officer of Ameren.

Key Highlights

  • 1Ameren Corporation completed the divestiture of its merchant generation business to Illinois Power Holdings, LLC (IPH) on December 2, 2013.
  • 2A December 2, 2013, letter agreement amended the original transaction, requiring Ameren to pay an additional $25 million to $35 million for disputed wholesale customer contracts.
  • 3Ameren will retain approximately $4 million of cash at Ameren Energy Marketing Company and is contingently liable for up to $4 million for railroad lease termination fees.
  • 4The company retained certain assets and liabilities, including pension obligations and two energy centers (Meredosia and Hutsonville).
  • 5Ameren received no cash proceeds from the divestiture, which will be recorded as a loss on discontinued operations.
  • 6The divestiture led to the departure of Steven R. Sullivan from his executive officer roles at Ameren.
  • 7The company's consolidated financial statements for 2012 were previously recast to reflect the discontinued operations presentation for the divested business.

Frequently Asked Questions

The main event reported is the completion of Ameren Corporation's divestiture of its merchant generation business to Illinois Power Holdings, LLC (IPH) on December 2, 2013.

No, Ameren received no cash proceeds as a result of the divestiture of its merchant generation business.

Ameren will record an estimated charge to earnings for the period, reflecting a loss on discontinued operations. This loss will be finalized and recorded in their full-year 2013 financial statements.

Ameren will pay an additional $25 million to $35 million for disputed wholesale customer contracts, retain approximately $4 million in cash at Ameren Energy Marketing Company, and is contingently liable for up to $4 million for certain railroad lease termination fees.