Summary
Xcel Energy Inc. announced on February 27, 2001, an agreement in principle to sell a significant portion of its equity investment in Yorkshire Power. This divestiture, excluding a residual 5% interest, is a strategic move to bolster the company's financial position. The retained interest is primarily to satisfy accounting requirements stemming from the merger of Northern States Power and New Century Energies in August 2000. The proceeds from this sale are earmarked for reducing short-term debt and canceling a planned equity issuance for the latter half of 2001. This action is expected to improve Xcel Energy's balance sheet and financial flexibility. The transaction is contingent on the buyer's shareholder approval and is anticipated to close by late March or early April 2001.
Key Highlights
- 1Xcel Energy to sell a majority stake (all but approximately 5%) in its Yorkshire Power equity investment.
- 2Sale is part of a strategic effort to improve the company's financial health.
- 3Retained 5% interest is for compliance with pooling-of-interests accounting from the Aug 2000 merger.
- 4Proceeds will be used to pay down short-term debt.
- 5The sale will eliminate a planned equity issuance for the second half of 2001.
- 6Transaction is subject to purchaser's shareholder approval.
- 7Expected closing date for the sale is late March or early April 2001.