Summary
American Electric Power Company, Inc. (AEP) announced on June 18, 2002, an agreement to sell its United Kingdom subsidiary, SEEBOARD, which handles retail electricity and gas supply and electricity distribution in southeast England, to London Electricity Group plc (LE Group). This divestiture is a significant strategic move, aiming to streamline AEP's operations and focus on its core U.S. markets. The transaction is expected to yield substantial cash proceeds for AEP while also transferring considerable debt and certain obligations to LE Group.
Key Highlights
- 1AEP to sell its UK subsidiary, SEEBOARD, to London Electricity Group plc (LE Group).
- 2Sale price includes 670 million pounds (approx. US$975 million) in cash.
- 3LE Group will assume approximately 722 million pounds (approx. US$1.05 billion) of SEEBOARD debt.
- 4LE Group will also assume obligations of 100 million pounds (approx. US$146 million) related to a power purchase agreement with Medway Power Ltd.
- 5AEP anticipates recognizing a pre-tax loss on the sale of approximately US$440 million in the second quarter of 2002, including an estimated US$80 million foreign exchange loss.
- 6The transaction is conditional on European Commission approval and is expected to close in four to six weeks.
- 7SEEBOARD includes electricity distribution and supply, a contracting business, and a 37.5% stake in Medway Power Ltd.