Shell's U.S. energy trading arm, Coral Energy Holding LP, has agreed to buy essentially all of Spokane, WA-based Avista Corp.'s merchant energy operations that comprise Avista Energy Inc., the companies said. The value and terms of the sale will not be fully worked out until the closing, which is expected in the late second quarter or early third quarter of this year.
Book value of the assets at the end of the quarter ended March 31 was $202 million, an Avista spokesperson said. More details on the deal will be given Wednesday in an Avista conference call with financial analysts in which preliminary first quarter earnings for the utility holding company will be discussed.
The two companies said the sale includes the operating assets of Avista Energy Canada Ltd., which will be acquired by Coral Energy Canada Inc., a Coral Energy subsidiary. Avista said it will receive cash for the assets acquired by Coral at approximately the book value of those assets at the closing, and in addition Avista will sell other assets not sold or transferred to Coral, including receivables, restricted cash and deposits with counterparties.
Avista Corp. CEO Gary Ely called the deal "the culmination of some very deliberate and strategic planning for Avista Energy and Avista Corp." -- noting it embodies three specific goals: (a) assuring that Avista Energy customers continue to receive the same high level of service, (b) ensuring that its valued employees are treated fairly, and (c) realizing a fair value for the business.
Coral ranked third in NGI's 4Q2006 ranking of top North American natural gas marketers.
Houston-based Coral Energy CEO Mark Hanafin said his company likes what he called Avista Energy's "strong presence in the Pacific Northwest and Western Canada" as a complement to Coral's existing portfolio in North America. Hanafin said Coral looks forward "to increasing our scale, resources and experience through this transaction, which will allow us to offer a broader portfolio of value-added services to our customers in the region."
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