Philadelphia to sell gas utility in 2 years, hires advisers
Aug 17 (Reuters) - The city of Philadelphia said on Friday it could sell its public natural gas utility in two years now that it has hired nearly a dozen professional firms to work on the deal.
The city has discussed privatizing the Philadelphia Gas Works - the largest municipally owned gas utility in the United States - for some time. The utility generated about $805 million in revenue in fiscal 2012, according to its operating budget.
"The hiring of a team of top-flight professionals is a clear demonstration to all, including potential buyers, how committed the city and its utility are to exploring the sale," Mayor Michael Nutter said in a statement.
Through a request for proposal process, the city, PGW and its board of directors hired a bevy of professional firms, including two New York investment banks, Lazard and M.R. Beal.
Also selected were five law firms, including the Philadelphia-based national law firm Ballard Spahr, with more legal advisers to be added in the future, Nutter said.
Two government-relations firms, as well as two public-relations firms, were also hired.
Together, the advisers will evaluate bids from potential buyers and negotiate a final deal. State regulators and the Philadelphia City Council must approve the sale.
In July 2010, the city hired Lazard to assess a potential PGW sale or lease. This February, the firm reported that the utility could fetch between $1.4 billion and $2.15 billion, depending on the buyer, the structure of the transaction and the inclusion of certain liabilities - in particular, retiree healthcare costs.
Founded in 1836, the utility serves about 500,000 customers.
- Tweet this
- Share this
- Digg this