Talen Energy (NYSE: TLN) on Feb. 1 completed the sale of Talen Ironwood Holdings LLC, which through its subsidiaries owns and operates the Ironwood combined-cycle, natural gas-fired plant in Lebanon County, Pa., to a subsidiary of TransCanada Corp. (TSX, NYSE: TRP).
The total purchase price, after estimated adjustments for net working capital, was $657 million. In connection with the transaction, Talen Energy repaid approximately $41 million in debt, plus a customary pre-payment premium, associated with the plant. Talen Energy expects to use transaction proceeds to retire pre-payable and maturing debt, and for other general corporate purposes.
Sale of the 704-MW plant supports mitigation measures required by a December 2014 Federal Energy Regulatory Commission order that approved the transactions that formed Talen Energy from a combination of assets of two other companies. Other previously announced mitigation sales in specified regions of the PJM Interconnection are expected to close in the first quarter of 2016, subject to the satisfaction of customary closing conditions.
Credit Suisse served as financial advisor to Talen Energy for the Ironwood transaction. Kirkland & Ellis LLP served as transaction counsel.