8-KOther Events

EXELON CORP 8-K Report (Jun 27, 2002)

Filed June 27, 2002For Securities:EXC

Summary

Exelon Corporation announced on June 27, 2002, that its subsidiary, Exelon Generation Company, LLC, has agreed to acquire Sithe New England Holdings, LLC. This transaction involves a $543 million note and the assumption of approximately $1.15 billion in project debt. The acquisition is structured to allow for potential future restructuring of the original Sithe transaction, providing Exelon with flexibility and enabling the acquisition of strategically aligned assets without additional risk. The company anticipates that this deal will not impact its 2002 earnings guidance.

Key Highlights

  • 1Exelon Generation to purchase Sithe New England Holdings for $543 million note and assumption of $1.15 billion in project debt.
  • 2Transaction includes potential for further restructuring to acquire select Sithe assets, reducing debt and streamlining integration.
  • 3Acquisition is expected to allow Exelon to integrate Sithe assets more quickly and achieve cost synergies.
  • 4The deal is structured to be tax-efficient.
  • 5Sithe New England Holdings comprises fossil-fueled generating facilities in Massachusetts and Maine with a total capacity of 4,471 megawatts (2,050 MW operating, 2,421 MW under construction).
  • 6FERC and other required approvals are targeted by October 31, 2002, with a potential closing in November 2002.
  • 7The acquisition is not expected to negatively impact Exelon's 2002 earnings guidance.

Frequently Asked Questions

The acquisition involves a $543 million note issued by Exelon and the assumption of approximately $1.15 billion in project debt, totaling around $1.693 billion.

Exelon has stated that the acquisition of Sithe New England Holdings is not expected to affect its earnings guidance for 2002.

The acquisition includes Sithe's New England plants: Sithe New Boston, Sithe Framingham, Sithe West Medway, Sithe Wyman, Sithe Mystic, Sithe ForeRiver, and Sithe Power Marketing. These are fossil-fueled plants with a total capacity of 4,471 megawatts, including units under construction.

Exelon has been a 49.9 percent owner of Sithe since December 2000 and has a Put and Call Agreement (PCA) that allows for the purchase of the remaining 50.1 percent. The options under the PCA become exercisable in December 2002.