Dynegy sells three power generating assets

Dynegy Inc. has reached agreement to sell three of its generating plants for approximately US$300 million. Combined with the previously announced LS Power transaction, a total of approximately US$780 million in aggregate sales proceeds will be used primarily for debt reduction.

Dynegy reached an agreement to sell its Lee Energy Facility, a 625 MW (summer capacity rating) gas-fueled peaking asset in the PJM ComEd region to an affiliate of Rockland Capital.

Dynegy will receive US$180 million in cash and avoid the incremental capital investment necessary to convert the plant to dual fuel status in order to meet PJM capacity performance obligations. The sale allows the Company to crystallize value in the ComEd region and generate additional cash proceeds for debt repayment.

Dynegy has also signed a purchase and sales agreement with Starwood Energy Group Global for two assets totaling US$119 million. The combined 310 MW (summer rating) of assets to be sold include two intermediate gas-fueled plants located in Dighton and Milford, Massachusetts. The Company anticipates allocating the cash proceeds to debt reduction.

The agreement fulfills the mitigation plan approved by the Federal Energy Regulatory Commission (FERC) regarding the Company’s purchase of ENGIE’s US-based asset portfolio. In its December 22, 2016 order, FERC found competitive concerns with respect to the capacity markets in the ComEd Locational Delivery Area (LDA) in PJM and the Southeastern New England (SENE) capacity zone in ISO-NE. Dynegy submitted a mitigation plan to address FERC’s concerns that called for an agreement to sell capacity in SENE within six months of closing.

Barclays served as lead financial advisor and Deutsche Bank served as advisor on the Dighton and Milford transactions. The transactions are subject to customary regulatory approvals.