American Electric Power (NYSE: AEP) said Nov. 12 that it has completed the sale of its commercial barge transportation subsidiary, AEP River Operations LLC, to American Commercial Lines (ACL), owned by Platinum Equity, for approximately $550 million.
AEP originally announced Oct. 1 that it had reached an agreement to sell AEP River Operations to ACL. AEP acquired the business, formerly known as MEMCO, in 2001. ACL purchased all the stock of AEP Resources, the parent company of AEP River Operations.
AEP netted approximately $400 million in cash after taxes, debt retirement and transaction fees. The company said it will invest the proceeds in its regulated business.
AEP will retain ownership of its captive barge fleet that delivers coal to the company’s regulated coal-fueled power plants owned by Appalachian Power, Kentucky Power and Indiana Michigan Power. AEP has signed a contract with ACL to dispatch and operate AEP’s captive barge fleet through the end of 2016. The captive barge fleet delivers about 19 million tons of coal annually to AEP’s regulated power plants. The fleet has 12 towboats, 498 barges and 229 employees.
AEP River Operations is a commercial inland barge company delivering about 45 million tons of products annually, including 10 million tons of coal. AEP River Operations has 56 towboats, 2,301 barges and 1,090 employees. The company is based in Chesterfield, Missouri, with operations in Paducah, Kentucky, and Convent, Algiers and Belle Chasse, Louisiana.
AEP earlier this year retired several coal-fired power plants/units in states like Indiana, Kentucky, Ohio and West Virginia, thus reducing its need for captive barge operations.
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to nearly 5.4 million customers through 223,000 miles of distribution lines in 11 states. AEP ranks among the nation’s largest generators of electricity, owning approximately 32,000 megawatts of generating capacity in the United States. AEP’s headquarters are in Columbus, Ohio.