Subject to certain regulatory approvals including from the Federal Energy Regulatory Commission (FERC) and Montana Public Service Commission, the transaction is likely to close in the second half of 2014.
UBS Investment Bank and RBC Capital Markets acted as PPL’s financial advisors, while Simpson Thatcher & Bartlett as the legal advisor.
The said hydro facilities are Thompson Falls Dam on the Clark Fork River; Kerr Dam on the Flathead River; Madison Dam on the Madison River; Hauser, Holter, Black Eagle, Rainbow, Cochrane, Ryan and Morony dams on the Missouri River; and Mystic Lake Dam on West Rosebud Creek.
The agreement does not include PPL Montana’s interest in the Colstrip facility or its J.E. Corette coal-fired facility located near Billings and the Butte-based power marketing and trading operations of the company’s affiliate, PPL EnergyPlus.
Meanwhile, PPL Montana will pay $271m to terminate a sale-leaseback arrangement for its interest in the Colstrip coal-fired facility and the termination is expected to complete by the end of 2013, pending FERC approval.
The company’s total net proceeds from the sale of hydroelectric facilities, the termination of the sale-leaseback agreement, and other adjustments enlisted in the applicable agreements, is likely to be around $623m.
