As part of its plan to reduce debt and strengthen its balance sheet, CMS Enterprises announced Wednesday that it has completed the previously announced sale of a portfolio of its businesses in Argentina and its northern Michigan nonutility natural gas assets for about $130 million (see Daily GPI, Feb. 5). The principal subsidiary of CMS Energy sold its interests in those businesses to Michigan-based Lucid Energy. The Argentina businesses sold by CMS Enterprises were the CT Mendoza and Ensenada generating plants and the TGM natural gas pipeline business. The sale of Argentine businesses originally was to include the CMS Enterprises interest in Hidroelectrica El Chocon SA. However, the CMS Enterprises 17.2% interest in El Chocon was sold last week to Endesa under a separate arrangement after Endesa exercised a right of first offer for $50 million. The total proceeds from the two transactions — the sale to Lucid Energy announced today and the sale of the El Chocon interest announced Friday — are $180 million. In Michigan, the sale to Lucid Energy includes CMS Enterprises’ natural gas pipelines and processing assets, the Antrim natural gas processing plant, 155 miles of associated gathering lines and interests in three special purpose gas transmission pipelines that total 110 miles. As a result of the sales to Endesa and Lucid Energy, CMS Energy expects to recognize an after-tax, noncash loss of approximately $160 million in the first quarter of 2007. CMS Enterprises said it will maintain its interest in the TGN natural gas business in Argentina, which remains subject to a potential sale to the government of Argentina or some other disposition. Regarding CMS Enterprises’ commitment to sell its 23.5% interest in TGN, CMS Energy said it expects to record an after-tax impairment charge of approximately $140 million in the first quarter of 2007 to reflect the fair value of its TGN ownership interest.
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