(Corrects fourth paragraph to say the divesture will reduce,
not add to, EBITDA and adjusted free cash flow)
April 18 U.S. power company Calpine Corp
said it will sell six power plants in the U.S. Southeast to LS
Power for $1.57 billion in cash to focus on the wholesale power
markets and better align its asset base.
The power plants together generated about 3.5 gigawatts of
capacity in Oklahoma, Louisiana, Alabama, Florida and South
With none of the plants restricted to any project debt,
Calpine expects the deal to result in net cash proceeds of about
The company said the divesture is expected to reduce its
adjusted earnings before interest, taxes, depreciation and
amortization by $100 million and cut its adjusted free cash flow
by about $70 million in 2014.
"Today's announcement represents substantial progress toward
the achievement of one of our top strategic priorities - the
monetization of our Southeast portfolio," Chief Executive Jack
Following Friday's sale, Calpine will retain ownership of
four natural gas-fired power plants in the Southeast totaling
1,738 megawatt capacity in Arkansas, Alabama and Florida.
The company said it will seek opportunities to monetize
Friday's deal is expected to close in the second quarter of
As part of deal, LS Power has agreed not to trade in
Calpine's stock until the close of the transaction.
(Reporting By Kanika Sikka in Bangalore; Editing by Marguerita