PPL Corp. (PPL) to Sell Maine Hydroelectric Assets to ArcLight Capital; Deal to Add $0.07-$0.09/Share
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PPL Corporation (NYSE: PPL) announced Wednesday (7/1) that its PPL Maine subsidiary has signed a definitive agreement to sell the majority of PPL Maine's hydroelectric generation business to Black Bear Hydro Partners, LLC, an affiliate of ArcLight Capital Partners, LLC, for a total of approximately $95 million, subject to the receipt of various state and federal regulatory approvals and consents.
The total purchase price includes certain contingent consideration that would be realized upon completion of PPL's previously announced sale, which is currently pending the receipt of certain state and federal regulatory approvals, of three other hydroelectric facilities to the Penobscot River Restoration Trust.
The sale to the ArcLight affiliate involves five hydroelectric generating facilities in Maine that produce a total of 23 megawatts of electricity and are 100 percent owned by PPL; and PPL's 50 percent ownership interest in a separate 13-megawatt hydroelectric project, of which the other 50 percent is already owned by another ArcLight affiliate.
The sale is expected to close later this year, following receipt of necessary regulatory approvals and consents. Spence said the sale is expected to result in a special after-tax gain in the range of $0.07 to $0.09 per share, including the contingent consideration. A portion of the gain would be recorded upon completion of the sale to the ArcLight affiliate later this year. The remaining portion of the gain would be recorded when PPL completes the sale of the other dams to the Penobscot River Restoration Trust. The sale to the ArcLight affiliate is expected to enhance PPL's cash flow position and to be modestly accretive to the company's earnings following the close of the transaction. PPL is not changing its current 2009 forecast of earnings from ongoing operations as a result of the sale.
The sale to the Penobscot River Restoration Trust originated in June 2004, when PPL agreed with a coalition of environmental groups, government agencies and the Penobscot Indian Nation on a settlement agreement that would provide the trust with the option to buy three of PPL's other hydroelectric dams. The trust exercised this option in June 2008, and the sale is pending approval of federal and state government agencies.
The five 100 percent PPL-owned facilities involved in the ArcLight agreement are the Ellsworth, Medway, Milford, Orono and Stillwater hydroelectric plants. ArcLight also will acquire from PPL the 50 percent interest in the West Enfield project that it doesn't already own.
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