8-KAcquisitions & DispositionsOther Events

ENTERGY CORP /DE/ 8-K Report, Acquisition Completed (Mar 4, 2016)

Filed March 4, 2016For Securities:ETR

Summary

This 8-K filing announces the completion of Entergy Corporation's acquisition of the Union Power Station, a 1,980 MW natural gas-fired power generation facility located in Arkansas. The acquisition, which closed on March 3, 2016, was a multi-entity transaction with Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans each acquiring specific portions of the facility. The aggregate purchase price was approximately $948 million, subject to adjustments. This acquisition represents a significant investment in power generation capacity for Entergy, particularly for its Arkansas, Louisiana, and Texas service territories. The financing details indicate a mix of debt issuance, cash from operations, and equity contributions from the parent company, with plans to refinance some of the initial borrowings through future debt issuance. Investors should monitor the operational performance and integration of this new asset into Entergy's portfolio.

Key Highlights

  • 1Entergy Corporation completed the acquisition of the Union Power Station, a 1,980 MW natural gas-fired power generation facility, on March 3, 2016.
  • 2The acquisition was executed through three Entergy subsidiaries: Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans.
  • 3The aggregate purchase price for the Union Power Station was approximately $948 million.
  • 4Entergy Arkansas acquired one power block and a 25% ownership interest.
  • 5Entergy Louisiana acquired two power blocks and a 50% ownership interest.
  • 6Entergy New Orleans acquired one power block and a 25% ownership interest.
  • 7Financing involved a combination of long-term debt, cash from operations, revolving credit facilities, and equity contributions from Entergy Corporation.

Frequently Asked Questions

The Union Power Station is a 1,980 MW natural gas-fired power generation facility located near El Dorado, Arkansas. Entergy is acquiring it to expand its power generation capacity and serve its customers in Arkansas, Louisiana, and Texas.

The aggregate purchase price for the Union Power Station was approximately $948 million, which is subject to further adjustment.

The acquisition was financed through a combination of methods by the respective subsidiaries. Entergy Arkansas used proceeds from a recent long-term debt issuance and other available funds. Entergy Louisiana and Entergy New Orleans utilized existing cash from operations, initial borrowings from the Entergy System Money Pool and revolving credit facilities, with the remainder for Entergy Arkansas and Entergy New Orleans being an equity contribution from Entergy Corporation. Entergy Louisiana and Entergy New Orleans plan to issue long-term debt to refinance these borrowings.

Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans are the subsidiaries involved. Entergy Arkansas owns 25%, Entergy Louisiana owns 50%, and Entergy New Orleans owns 25% of the facility.