8-KRegulation FD

FIRSTENERGY CORP 8-K Report, Regulation FD Disclosure (Dec 13, 2017)

Filed December 13, 2017For Securities:FE

Summary

This 8-K filing from FirstEnergy Corp. (FE) on December 13, 2017, announces the completion of the sale of certain natural gas generating plants by its subsidiary, Allegheny Energy Supply Company, LLC (AE Supply). The sale included four natural gas generating plants, AE Supply's stake in the Buchanan Generating Facility, and a portion of its interest in the Bath County hydroelectric power station. The transaction was made to Aspen Generating, LLC, a subsidiary of LS Power Equity Partners III, LP, for an all-cash purchase price of $825 million, subject to adjustments. FirstEnergy received approximately $390 million in net proceeds from the sale of the natural gas plants, reflecting an adjustment based on the closing date. This divestiture is part of FirstEnergy's strategy to transition towards a fully regulated business profile. While the sale addresses some of the company's assets in the competitive energy services segment, the filing also reiterates significant risks and uncertainties associated with its remaining competitive energy services (CES) operations, including potential debt restructuring and bankruptcy filings for subsidiaries like FirstEnergy Solutions Corp. (FES) and FirstEnergy Nuclear Operating Company (FENOC).

Key Highlights

  • 1FirstEnergy Corp. subsidiary completed the sale of four natural gas generating plants and partial interests in other facilities.
  • 2The sale was made to Aspen Generating, LLC (a subsidiary of LS Power Equity Partners III, LP).
  • 3The aggregate sale price was $825 million, subject to adjustments.
  • 4FirstEnergy received approximately $390 million in net proceeds from the sale of the natural gas plants.
  • 5This transaction is part of FirstEnergy's strategic move to transition to a fully regulated business.
  • 6The filing highlights ongoing risks and uncertainties related to the company's Competitive Energy Services (CES) segment, including potential bankruptcy for subsidiaries FES and FENOC.

Frequently Asked Questions

FirstEnergy sold four natural gas generating plants, its subsidiary's 50% interest in the Buchanan Generating Facility, and approximately 59% of its interest in the Bath County hydroelectric power station.

The buyer was Aspen Generating, LLC, a wholly-owned subsidiary of LS Power Equity Partners III, LP.

The agreed-upon purchase price was $825 million, subject to adjustments. FirstEnergy received approximately $390 million in net proceeds specifically from the sale of the natural gas generating plants, after an adjustment related to the closing date.

This divestiture aligns with FirstEnergy's stated strategy to transition its business model towards becoming a fully regulated utility, reducing its exposure to the competitive energy markets.

No, while this sale is a step in its strategy, the filing continues to highlight significant risks and uncertainties, particularly concerning its Competitive Energy Services (CES) segment, including the potential for bankruptcy proceedings for subsidiaries like FirstEnergy Solutions Corp. (FES).