Progress Energy To Sell Subsidiary in 2007
Posted December 18, 2006 4:09 p.m. EST
The subsidiary includes power plants in Georgia that Progress paid $345 million for in 2001.
The proposed sale is part of Progress Energy’s plan to reduce debt as it prepares for expansion required to meet growing power needs. It recently sold a natural gas subsidiary for a profit of $300 million.
Progress announced last week that it had selected a site for a new nuclear power plant in Florida, but a final decision has not been made about constructing it.
The company could also choose to expand its nuclear power generating capacity at its Shearon Harris facility in Wake County.
"We are nearing the completion of our restructuring efforts and I am pleased with our continued success in the execution of the plan," said Peter Scott, chief financial officer of Progress Energy, in a statement. "Over the past year, we have reduced our holding company debt, lowered our risk profile and strengthened our balance sheet and credit metrics. We are now better positioned to accommodate the significant future growth we expect to see in our electric utilities."
No price was set for the Competitive Commercial Operations group. “Substantially all” of its assets would be sold, and the company will take a $165 million, or 66 cents per share, charge against fourth quarter earnings, Progress said in a statement.
However, the Raleigh-based utility said the sale should produce a “positive” effect on cash.
The subsidiary’s assets include power plants capable of generating 1,800 megawatts of power that are based in Georgia. Other assets include contracts with 16 Georgia Electric Membership Cooperatives.
Progress (NYSE: PGN) shares traded down 23 cents at $49.06 just ahead of the market close on Monday.