Sept 30 (Reuters) - American Electric Power said on Friday it would sell its Kentucky operations at about 7% lower enterprise value of $2.65 billion to a unit of Algonquin Power & Utilities Corp , compared with the original deal.
AEP expects to receive about $1.2 billion in cash, net of taxes and transaction fees, instead of its original estimate of $1.45 billion.
The sale to Algonquin's unit, Liberty, which was originally set to close in the second quarter of 2022, is now expected to be finalised in January 2023 pending approval from the U.S. energy regulator, the companies said on Friday. Liberty is the regulated utility business of Algonquin Power.
Columbus, Ohio-based AEP also said it expects a third-quarter pre-tax loss ranging from $180 million to $220 million due to the lower deal value and extended timeline, but added that its operating earnings forecast would not be impacted.
Brett Mattison, president and chief operating officer (COO) of AEP's Kentucky Power, has been named president and COO of Southwestern Electric Power Company, effective Jan. 1, the power company said.
AEP and Algonquin had announced the original deal in October last year. AEP's Kentucky operations include Kentucky Power, a utility that serves 165,000 customers and Kentucky Transco, a regulated transmission business.
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