Mirant Announces Agreement for Sale of Caribbean Business
April 18 2007 - 9:24AM
PR Newswire (US)
ATLANTA, April 18 /PRNewswire-FirstCall/ -- Mirant Corporation
(NYSE:MIR) announced today that it has entered into a definitive
purchase and sale agreement with a subsidiary of Marubeni
Corporation for the sale of its Caribbean business for $1.082
billion, which includes related debt of approximately $350 million,
power purchase obligations of approximately $153 million and
estimated working capital at closing. The net proceeds to Mirant
from the sale are expected to be approximately $565 million after
payment of transaction costs estimated to be approximately $14
million. Upon completion of the transaction, Mirant expects to
realize a pre-tax gain of approximately $65 million for financial
reporting purposes and a gain for tax reporting purposes of
approximately $150 million. The transaction is expected to close by
mid-2007 after the satisfaction of various conditions to closing.
Mirant's Caribbean business includes controlling interests in two
integrated utilities: Jamaica Public Service Company ("JPS") of
which Mirant owns 80% and Grand Bahama Power Company of which
Mirant owns 55%. Mirant also owns 39% of PowerGen, the owner and
operator of three power plants in Trinidad, 25% of Curacao
Utilities Company which provides electricity and other utility
services and a $40 million convertible preferred equity interest in
Aqualectra, an integrated water and electric company in Curacao.
JPS purchases power under power purchase agreements ("PPAs") with
two independent generation companies. The sole purpose of these
independent companies is to generate power for sale to JPS. Prior
to the third quarter of 2006, Mirant had accounted for the PPAs as
capital leases. During the third quarter of 2006, Mirant
reevaluated these PPAs based on evolving interpretations of the
Financial Accounting Standards Board (FASB) Interpretation No. 46,
"Consolidation of Variable Interest Entities," as amended. As a
result of this reevaluation, beginning with the third quarter of
2006, Mirant now consolidates the assets and liabilities of the two
independent generation companies and, accordingly, does not reflect
the PPAs as capital leases. The PPAs will remain obligations of JPS
after the sale is completed. "We have valued doing business in
Curacao, Grand Bahama, Jamaica and Trinidad," said Edward R.
Muller, Chairman and Chief Executive Officer of Mirant Corporation.
"We wish the people of all four countries and Marubeni Corporation
great success." Mirant was advised in the transaction by J.P.
Morgan Securities Inc., as financial advisor. Mirant is a
competitive energy company that produces and sells electricity in
the United States, the Caribbean, and the Philippines. Mirant owns
or leases approximately 17,300 megawatts of electric generating
capacity globally. The company operates an asset management and
energy marketing organization from its headquarters in Atlanta. For
more information, please visit http://www.mirant.com/. Stockholder
inquiries: 678 579 7777 DATASOURCE: Mirant CONTACT: Felicia
Browder, +1-678-579-3111, , or Investor Relations, Mary Ann Arico,
+1-678-579-7553, , or Sarah Stashak, +1-678-579-6940, , or
Stockholder inquiries, +1-678-579-7777, all of Mirant Web site:
http://www.mirant.com/
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