Power producer Talen Energy Corp. (TLN) said it would sell three plants in Pennsylvania for $1.51 billion to meet regulatory requirements related to its formation in 2014.
Talen said on Oct. 8 it would sell a natural gas-fired plant to TransCanada Corp. (TRP) for $654 million and two hydroelectric projects to Brookfield Renewable Energy Partners LP (BEP) for $860 million.
Talen has to divest assets in the PJM market, which covers parts of the U.S. mid-Atlantic and Midwest, to meet Federal Energy Regulatory Commission (FERC) rules.
Talen was formed in June 2014 after Pennsylvania power company PPL Corp.'s (PPL) merchant generation business merged with private equity firm Riverstone Holdings LLC's generation assets.
Merchant power generation businesses sell power to wholesale markets, where prices are not regulated by the government.
The power plants being divested have total generating capacity of 996 megawatts. Talen said the expected net income from the plants was about $56 million for 2016.
The transactions are expected to close in the first quarter of 2016.
Talen shares were up slightly at $10.60 in light premarket trading. Up to close on Oct. 7, Talen's market value had nearly halved since it started trading as a separate company on May 18.
Credit Suisse and RBC Capital Markets advised Talen on the deals.
Recommended Reading
Quantum’s VanLoh: New ‘Wave’ of Private Equity Investment Unlikely
2024-10-10 - Private equity titan Wil VanLoh, founder of Quantum Capital Group, shares his perspective on the dearth of oil and gas exploration, family office and private equity funding limitations and where M&A is headed next.
Energy Sector Sees Dramatic Increase in Private Equity Funding
2024-11-21 - In a 10-day period, private equity firms announced almost $20 billion in energy funding. Is an end in sight for the fossil fuel capital drought?
Exclusive: How E&Ps Yearning Capital can Stand Out to Family Offices
2024-10-15 - 3P Energy Capital’s Founder and Managing Partner Christina Kitchens shares insight on the “educational process” of operators looking at opportunities in the U.S. and how E&Ps looking for capital can interest family offices, in this Hart Energy Exclusive interview.
Twenty Years Ago, Range Jumpstarted the Marcellus Boom
2024-11-06 - Range Resources launched the Appalachia shale rush, and rising domestic power and LNG demand can trigger it to boom again.
Investor Returns Keep Aethon IPO-ready
2024-10-08 - Haynesville producer Aethon Energy is focused on investor returns, additional bolt-on acquisitions and mainly staying “IPO ready,” the company’s Senior Vice President of Finance said Oct. 3 at Hart Energy’s Energy Capital Conference (ECC) in Dallas.