Energy provider Calpine has revealed that it is negotiating the sale of a further four gas-fired power plants, representing nearly 850 megawatts of capacity and $357 million in assets, as it continues to strive towards reducing more than $3 billion of debt by the end of 2005
Three of the plants are located in the Pennsylvania-New Jersey-Maryland (PJM) power market – the fourth is in Illinois. Calpine has entered into four separate, non-binding agreements for the sale of the power plants. Three of the four asset sale agreements are with Tenaska Power Fund. The fourth agreement is with Diamond Generating Corporation.
Completion of these four asset sales is dependent upon the execution of definitive purchase and sale agreements for each plant and other terms and conditions, including regulatory approval. Calpine said it will use net proceeds from the sale to reduce debt.
Calpine continues to evaluate attractive opportunities to sell non-strategic power plants, stated Calpine CFO Bob Kelly. While these are strong operating plants, they present Calpine with an excellent opportunity to divest of non-core assets, strengthen its balance sheet and retain the long-term value of the company’s generating portfolio.