Summary
Exelon Corporation, through its subsidiary Exelon Generation Company, LLC, has entered into a definitive agreement to sell its interest in Sithe Energies, Inc. to Dynegy Inc. for $135 million in cash. This transaction follows Exelon Generation's earlier exercise of a call option to acquire the remaining 50% interest in Sithe for $97 million, with the stated intent to divest its entire stake. This strategic move is expected to remove approximately $836 million of debt associated with the Independence plant from Exelon's balance sheet. While the company anticipates receiving about $60 million in cash distributions from Sithe prior to the closing of the sale to Dynegy, Exelon projects that this divestiture will not have a material impact on its future earnings. The sale is subject to regulatory approvals, with an anticipated closing in early first quarter 2005.
Key Highlights
- 1Exelon Generation to sell 100% interest in Sithe Energies to Dynegy Inc. for $135 million cash.
- 2Transaction follows prior acquisition of remaining 50% interest in Sithe for $97 million.
- 3Sale will deconsolidate approximately $836 million of debt related to the Independence plant.
- 4Exelon expects to receive ~$60 million in cash distributions from Sithe before the sale closes.
- 5The divestiture is not expected to materially impact Exelon's future earnings.
- 6Sale excludes Sithe International Inc., which has been retained and sold to a Generation subsidiary.
- 7Transaction is subject to regulatory approvals, with closing expected in early Q1 2005.