Closing on its previously announced divestiture, Kansas City, MO-based Aquila Inc. announced that it has completed the sale of its interests in 12 power plants to Teton Power Funding LLC, an affiliate of ArcLight Capital Partners LLC. Aquila received total proceeds from the sale of approximately $257 million, after adjustments for working capital related to two of its consolidated projects.

The power plants are a part of Aquila’s residual merchant energy portfolio and represent a net ownership interest of 627 MW. The plants are in California, Florida, Georgia, Maine, New York and Washington, as well as Jamaica. Aquila’s three uncontracted peaking power plants are not included in the sale.

The company said it plans to use the net proceeds from the transaction — first announced in November (see NGI, Nov. 17, 2003) — to reduce liabilities and strengthen its balance sheet. Lehman Brothers acted as exclusive financial advisor to Aquila in connection with the transaction.

Since its last update in November 2003, Aquila has closed on its Midlands Electricity, Independent Power plant and ArcLight deals. According to spokesman Al Butkus, once the Canadian networks sale is completed, Aquila will have completed its major asset sales. He added that Aquila still has its tolling agreements and long-term gas contracts to deal.

Since it began restructuring in 2002, Aquila has generated “approximately $2 billion” in completed asset sales, Butkus said. Once the company closes on its Canadian networks deal in May, Aquila will record an additional $600-700 million. With the current rate of restructuring, Butkus noted that Aquila should be finished sometime in early to mid-2005.

©Copyright 2004 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.