Summary
American Electric Power Company, Inc. (AEP) has announced the sale of its DOW Cogeneration Facility located in Plaquemine, Louisiana, to The Dow Chemical Company for $64 million plus other consideration. This strategic decision follows a review of various operational options for the facility. As a consequence of this approved sale, AEP will reclassify the DOW Cogeneration Facility as 'Held For Sale' in its third quarter 2006 financial statements. Investors should note that AEP anticipates recognizing a significant non-cash impairment charge of $209 million ($136 million after tax) related to this asset. The transaction is slated for closure in December 2006, subject to regulatory approvals and standard closing conditions. Upon closing, AEP intends to use the sale proceeds, alongside corporate borrowings, to extinguish a $525 million lease financing obligation associated with the facility.
Key Highlights
- 1AEP to sell DOW Cogeneration Facility in Plaquemine, Louisiana to The Dow Chemical Company for $64 million and other consideration.
- 2The facility will be classified as 'Held For Sale' in the third quarter of 2006.
- 3A non-cash impairment charge of $209 million ($136 million after tax) is expected in Q3 2006 due to the sale.
- 4The sale is anticipated to close in December 2006, pending regulatory approvals and customary closing conditions.
- 5Proceeds from the sale will be used to repay a $525 million lease financing obligation, supplemented by corporate borrowings.