8-KAcquisitions & Dispositions

AMEREN CORP 8-K Report, Acquisition Completed (Feb 4, 2014)

Filed February 4, 2014For Securities:AEE

Summary

Ameren Corporation (AEE) filed an 8-K on February 4, 2014, reporting the completion of a significant divestiture transaction. On January 31, 2014, Ameren's subsidiary, AmerenEnergy Medina Valley Cogen, L.L.C. (Medina Valley), sold three gas-fired energy centers (Elgin, Gibson City, and Grand Tower) to an entity affiliated with Rockland Capital, LLC for $168 million, subject to a working capital adjustment. This sale is part of Ameren's broader strategy to divest its energy generation assets. The report also clarifies the financial implications of this sale, particularly concerning an agreement with Illinois Power Holdings, LLC (IPH), a subsidiary of Dynegy Inc., related to the prior sale of New Ameren Energy Resources Company, LLC (New AER). Any proceeds exceeding prior payments to Genco (formerly Ameren Energy Generating Company) from the Gas Energy Centers sale will be passed on to Genco, including any portion of the escrowed funds held back for indemnity obligations.

Key Highlights

  • 1Completion of sale of Elgin, Gibson City, and Grand Tower gas-fired energy centers for $168 million (pre-working capital adjustment) on January 31, 2014.
  • 2The buyer is a special purpose entity affiliated with Rockland Capital, LLC.
  • 3$17 million of the purchase price will be held in escrow for two years to cover potential indemnity obligations.
  • 4A net working capital adjustment will be finalized within 120 days of closing.
  • 5The sale is part of Ameren's strategy to divest its energy generation assets.
  • 6Proceeds from this sale, net of taxes and expenses exceeding prior payments to Genco, will be paid to Genco.
  • 7Financial statements have been recast to reflect these assets as discontinued operations.

Frequently Asked Questions

The primary event is the completion of the sale of three gas-fired energy centers (Elgin, Gibson City, and Grand Tower) by Ameren's subsidiary, Medina Valley, to an entity affiliated with Rockland Capital for $168 million.

The sale price is $168 million before a net working capital adjustment. Additionally, $17 million of the purchase price is held in escrow for two years to cover potential indemnity obligations. The net working capital adjustment will be finalized within 120 days after the closing date.

There is an agreement with Illinois Power Holdings, LLC (IPH), a subsidiary of Dynegy Inc., concerning the prior sale of New AER. If the Gas Energy Centers sale yields proceeds exceeding amounts previously paid to Genco, those net excess proceeds, including any released escrow funds, will be paid to Genco.

This divestiture is part of Ameren Corporation's broader strategy to exit its energy generation business and focus on its regulated utility operations.