Summary
Sempra Energy (SRE) announced on June 28, 2018, that its Board of Directors has approved a strategic plan to divest certain non-utility natural gas storage assets located in the southeastern U.S., along with all of its U.S. wind and solar assets. This decision stems from a comprehensive portfolio review aimed at reallocating capital to businesses that can enhance shareholder value. The divestiture includes significant natural gas storage facilities, Mississippi Hub and Bay Gas Storage Company, and all renewable energy generation assets (wind and solar) within its Sempra Renewables segment. As a direct consequence of this divestiture plan, Sempra expects to record substantial impairment charges in the second quarter of 2018, estimated to range between $1,470 million and $1,545 million pre-tax. These charges reflect the adjustment of these assets' carrying values to their estimated fair values less costs to sell, and importantly, are not anticipated to result in future cash expenditures beyond minor selling costs.
Key Highlights
- 1Sempra Energy (SRE) is divesting its U.S. wind and solar assets, as well as certain non-utility natural gas storage assets in the southeastern U.S.
- 2The divestiture is a result of a strategic portfolio review to optimize capital allocation and enhance shareholder value.
- 3Expected impairment charges for the second quarter of 2018 are estimated between $1,470 million and $1,545 million pre-tax.
- 4The impairment charges are primarily due to adjusting asset carrying values to estimated fair values less costs to sell.
- 5The natural gas storage assets being divested include Mississippi Hub and Bay Gas Storage Company.
- 6The renewable assets include operating wind and solar facilities with a combined generating capacity of approximately 2,600 megawatts.
- 7The company does not expect these impairment charges to result in future cash expenditures, other than estimated selling costs of approximately $10 million.