New York, NY, United States (4E) – Calpine Corp. said Friday said it will sell to LS Power its six power plants in its Southeast region in an all-cash deal worth $1.57bn, subject to working capital and some adjustments.
The power plants could generate a combined-cycle generation capacity of 3,498 MW in Alabama, Florida, Louisiana, Oklahoma and South Carolina. Both companies expect the deal to be completed in the second quarter of this year.
The wholesale power generation company expects to use existing federal and state net operating losses to offset the projected taxable gains from the transaction. None of the assets in the deal carry a project debt.
The deal is expected to yield net cash proceeds of around $1.53bn, which Calpine plans to allocate in a way that keeps leverage neutrality and improve per-share adjusted free cash flow.
Calpine said that the divestiture move will align its asset base with its focus on competitive wholesale power markets, particularly in its core regions that include the Eastern U.S., as well as the Western U.S. like California and Texas.