Sale subject to customary closing conditions, including Hart-Scott-Rodino review
Energy services company Reliant Energy has reached an agreement to sell its Texas retail business to NRG Energy for $287.5m in cash plus working capital.
Reliant Energy will continue to own a portfolio of more than 14,000MW of power generation assets. As of February 13, 2009, the company has available liquidity of $2 billion, comprised of $1.5 billion in cash and $0.5 billion of unused credit facilities capacity. On a pro-forma basis, gross debt is expected to be approximately $3 billion.
The closing of the sale, which is expected to occur in the second quarter of 2009, will resolve the litigation regarding Reliant’s credit arrangements with Merrill Lynch.
Net proceeds will be offered to secured debt holders to reduce outstanding debt. The sale is subject to customary closing conditions, including Hart-Scott-Rodino review.
Mark Jacobs, president and CEO of Reliant Energy, said: The transaction creates value for our shareholders and eliminates the capital requirements of the retail business. Going forward, Reliant will be well positioned, with a diversified portfolio of generating assets, a strong balance sheet and ample liquidity.