US-based power generation company Dynegy has agreed to sell a portion of its indirect interest in Plum Point Energy Associates to John Hancock Life Insurance Company for $82 million in cash.
Plum Point Energy Associates (PPEA) owns approximately 57% of the 665MW Plum Point power generation facility currently under construction near Osceola, Arkansas. The non-controlling interest to be purchased by John Hancock equates to approximately 125MW in the Plum Point facility. Dynegy will maintain construction and commercial control of the facility.
Bruce Williamson, chairman and CEO of Dynegy, said: This transaction demonstrates the underlying value of our construction and development projects and the flexibility we have to execute strategic options for capturing value for our stockholders. One option for creating upside is the selective monetization of project interests as we pursue the highest and best return for our investors. In this case, we are able to bring forward significant net present value, while retaining the majority of the project.
Upon the closing of the sale, Dynegy will own an equivalent of approximately 140MW and will maintain approximately 60% of the economic value through Dynegy’s ownership of PPEA Holding Company, which owns PPEA. Dynegy expects to retain the majority of the forecasted cash flows associated with the project.