Talen Energy (NYSE: TLN) announced Oct. 23 that it reached an agreement late the prior day to sell the 399-MW C.P. Crane coal-fired power plant near Baltimore, Maryland, to an affiliate of Avenue Capital Group.
The sale is part of a Federal Energy Regulatory Commission requirement to divest certain assets in specific regions of the PJM Interconnection, which include eastern Pennsylvania, Maryland and New Jersey, issued by FERC in late 2014 as part of its approval of the transactions that formed Talen Energy. Announced asset sales to date, including the Crane sale announcement, total 1,395 MW. Talen Energy said it continues to review and evaluate options for the remaining identified mitigation assets.
Proceeds of the sale are not material, and the effects of divesting the Crane plant on Net Income, Adjusted EBITDA, Cash from Operations and Adjusted Free Cash Flow on a full-year 2016 basis are not expected to be material, the company said. The transaction is expected to close in the first quarter of 2016, following receipt of required regulatory approvals and other customary closing conditions.
Goldman Sachs served as financial advisor to Talen Energy. Kirkland & Ellis was Talen Energy’s transaction counsel.
Avenue Capital Group is an established global alternative investment firm with approximately $13.2 billion in assets under management, as of Sept. 30, 2015.
Crane is a three-unit coal plant located near Baltimore that went into commercial operation in the 1960s and used to belong to Baltimore Gas & Electric. U.S. Energy Information Administration data shows it getting coal earlier this year from Arch Coal‘s Black Thunder and Peabody Energy‘s North Antelope Rochelle mines in the Powder River Basin, plus some coal from CONSOL Energy‘s Bailey mine complex in Pennsylvania.
Talen Energy said Oct. 8 that it has agreed to sell three Pennsylvania plants with a combined capacity of 996 MW for $1.51bn in gross cash proceeds, subject to customary purchase price adjustments. This includes the Ironwood combined-cycle, natural gas-fired plant, and the separate sale of the Holtwood and Wallenpaupack hydroelectric projects. The transactions should close in early 2016. Talen is selling off these assets in compliance with the same FERC mandate that triggered the Crane deal.
The 704-MW Ironwood plant is being sold to a subsidiary of TransCanada (TSX, NYSE: TRP) for a total purchase price of $654m, subject to the usual purchase price adjustments. The Holtwood and Lake Wallenpaupack hydroelectric projects, with a combined capacity of 292 MW, are being sold to a subsidiary of Brookfield Renewable Energy Partners for $860m, subject to customary purchase price adjustments.