Summary
CMS Energy Corporation (CMS) announced on July 11, 2007, the entry into a material definitive agreement to sell its interests in the GasAtacama project located in Chile. The sale, which is being conducted through various subsidiaries, involves equity interests in entities that own the project, including natural gas pipelines in Argentina and Chile, and a 780 MW gas-fired generation facility in Chile. The Chilean power plant has been refitted to operate on oil due to gas supply curtailments from Argentina. The buyer is Pacific Energy LLC, a subsidiary of Empresa Nacional De Electricidad S.A. (Endesa), which is exercising a right of first offer. The agreed-upon purchase price for the GasAtacama project is $80 million. The transaction is subject to certain closing conditions and is anticipated to close in August 2007. Notably, CMS Energy has no post-closing indemnity obligations, and Endesa has provided a guarantee for the buyer's payment obligations.
Key Highlights
- 1CMS Energy is selling its interest in the GasAtacama project in Chile for $80 million.
- 2The sale includes natural gas pipelines in Argentina and Chile, and a 780 MW power generation facility in Chile.
- 3The buyer is Pacific Energy LLC, a subsidiary of Endesa, exercising a right of first offer.
- 4The transaction is subject to closing conditions and expected to close in August 2007.
- 5CMS Energy will have no post-closing indemnity obligations related to the sale.
- 6Endesa has provided a guarantee for the buyer's payment obligations, mitigating CMS Energy's risk.
- 7The Chilean power plant has been adapted to run on oil due to gas supply issues.