Goldman Sachs sells Cogentrix to energy fund

NEW YORK, Sept 19 Wed Sep 19, 2007 5:04pm EDT

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NEW YORK, Sept 19 (Reuters) - Cogentrix Energy Inc, a unit of Goldman Sachs Group Inc (GS.N), has sold an 80 percent stake in 14 power plants to Energy Investors Funds, a buyout investor that specializes in U.S. energy and power assets, for undisclosed terms.

EIF's United States Power Fund III LP is buying 80 percent of Cogentrix' interest in 14 power projects totaling 2,336 net megawatts of generating capacity. Cogentrix will retain a 20 percent stake in the projects.

"We look forward to working as a team with EIF in enhancing the value of what will be a co-owned portfolio," said Ed Canaday, a spokesman for Goldman and Cogentrix.

EIF said the deal is expected to close by the end of December and subject to closing conditions and regulatory approvals.

Goldman Sachs, the largest investment bank in terms of market value, acquired Cogentrix in December 2003 for $2.4 billion. The purchase provided stakes in 26 plants that could support its industry leading energy trading business.

Over the past two years, Goldman has pared down its portfolio as the value of power assets recovered. Owning physical assets is viewed as less critical for traders.

Goldman in May put most of its 18 power generation assets up for sale, as first reported by Reuters, although it plans to retain Charlotte, North Carolina-based Cogentrix as a subsidiary.

The New York investment bank, began building up a portfolio of power plants in 2003, a time when distressed energy companies such as Enron, Dynegy Inc (DYN.N) and El Paso Corp EP.N were shedding power plants at fire-sale prices to stay afloat. (Reporting by Joseph A. Giannone)

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