logo-loader

AES Corp narrows Q4 loss, to sell natural gas-fired plant to PPL for $304 mln

Last updated: 07:36 27 Feb 2012 EST, First published: 08:36 27 Feb 2012 EST

no_picture_pai

Electric power utility AES Corp. (NYSE:AES) said on Monday it has agreed to sell AES Ironwood and AES Prescott to PPL Corp. (NYSE:PPL) for $304 million, amid reporting a narrower fourth quarter loss.

The purchase price consists of $87 million in cash and includes $4.8 million in expected working capital, and about $217 million of net project debt of AES Ironwood.

AES Ironwood and AES Prescott together operate a 705 megawatt natural gas-fired power plant in Pennsylvania, the company said.

The plant began operations in 2001, and over the last four years PPL EnergyPlus – the marketing and trading unit of PPL, has supplied natural gas for the plant in return for securing its full output under a tolling agreement that expires in 2021.

Last year, AES announced plans to narrow its geographic focus and sell non-core assets to enhance shareholder value and continue to grow in key markets.

U.S.-based PPL owns and controls about 19,000 megawatts of generating capacity in the United States. It sells energy in key U.S. markets, and delivers electricity and natural gas to about 10 million customers across the U.S. and the U.K.

"The acquisition of the Ironwood facility is an excellent opportunity for us to bring into full ownership additional combined-cycle gas generation in PJM at an attractive valuation,” PPL’s chief executive Bill Spence said.

The deal is slated to close in the second-quarter of 2012, after customary regulatory approvals and third party consents.

In a separate statement announced on Monday, AES Corp said fourth-quarter losses narrowed thanks to new businesses in Europe and strong demand and volume growth in Latin America.

For the fourth-quarter that ended December 31, the power generation company posted a narrower net loss of $209 million, or 27 cents a share. This compares with a year-earlier net loss of $436 million, or 55 cents a share.

Excluding one-time items, such as mark-to-market derivative impacts, currency translations and other items, adjusted earnings were 23 cents, down from 25 cents a year earlier.

Analysts polled by Bloomberg were predicting earnings of 24 cents a share.

Revenue rose to $9.5 billion from $8.91 billion a year earlier.

Quarterly gross margin widened to 25.7 percent from 24.3 percent in the fourth quarter of 2010.

The company cut its full-year adjusted per share earnings guidance. It now expects to see adjusted earnings of $1.22 to $1.30 a share. That is down from its November estimate of $1.27 to $1.37 a share.

Shares of AES Corp closed at $13.80 on Friday, and were inactive before the bell Monday. PPL’s stock rose by one cent to $28.86 in pre-market trade.

Ramp Metals Launches Drilling Program in Pursuit of High-Grade Nickel in...

Ramp Metals CEO Jordan Black joined Steve Darling from Proactive to introduce the company to the public domain and share exciting developments in the mining industry. With a background as a geotechnical engineer and experience in venture capital, including a notable role in taking GoldSpot...

19 minutes ago