Talen Energy to Sell Three Power Plants for $1.51 Billion
Talen Energy Corp., the spinoff of PPL Corp.’s power-generation businesses, said on Thursday it has reached agreements to sell three Pennsylvania power plants for about $1.51 billion.
The sales are part of the regulatory requirements allowing for the creation of Talen earlier this year.
Talen said it was selling the more than 700-megawatt Ironwood plant to a subsidiary of TransCanada Corp. for $654 million.
TransCanada said the acquisition of the plant is expected to immediately add to earnings and will generate about $90 million to $110 million in annual earnings before interest, taxes, depreciation and debt repayment.
“The Ironwood power plant will be very complementary to our U.S. northeast operations,” said William Taylor, TransCanada’s executive vice president.
TransCanada said the transaction was expected to close in the first quarter of 2016. The Calgary, Alberta-based TransCanada operates a network of natural gas pipelines that extends more than 42,000 miles.
Talen’s Holtwood and Lake Wallenpaupack hydroelectric projects, with a combined capacity of nearly 300 megawatts, meanwhile, are being sold to a subsidiary of Brookfield Renewable Energy Partners L.P. for $860 million.
“These high-quality assets provide a unique opportunity to leverage our operating platform and hydroelectric expertise in a market facing significant coal retirements and increasing reliance on renewables,” said Sachin Shah, chief executive of Brookfield Renewable.
Brookfield Renewable said the transaction provided a strong fit with its 417-megawatt Safe Harbor facility located 8 miles upstream from Holtwood.
Brookfield Renewable, a Hamilton, Bermuda-based electricity company, said it expected the transaction to close by the first quarter of 2016.
Talen said it expects to use net proceeds of the deals to pay down debt, which stood at about $3.18 billion of long-term borrowings as of midyear.