As part of its strategic plan to focus its business on core competencies, NiSource Inc. has completed the sale of its telecommunications subsidiary, Columbia Transmission Communications Corp. (Transcom), to NEON Communications Inc., a provider of advanced optical network services in the U.S. Northeast and Mid-Atlantic regions.

On July 3, NiSource’s subsidiary, Columbia Energy Group, executed an agreement to sell 100% of the outstanding capital stock of Transcom to NEON, and during the second quarter of 2003, NiSource recognized an after-tax loss of $2.5 million related to the then pending sale.

NiSource said that since the fourth quarter of 2002, it has reported the results of operations related to Transcom as discontinued operations on its consolidated income statements and Transcom’s assets and liabilities have been separately aggregated and reflected as assets and liabilities of discontinued operations on NiSource’s consolidated balance sheets. As a result, all prior periods have been restated to reflect Transcom as discontinued operations.

“Virtually all of NiSource’s operating income is derived from our core, regulated assets,” said Gary L. Neale, NiSource CEO. “Moving forward, our strategy is to focus on optimizing the potential of our utility and pipeline assets to deliver long-term value to our shareholders.”

NiSource picked up Transcom as a result of its acquisition of Columbia Energy Group in 2000. Transcom owns and operates a dark fiber optic system, along a diverse route between New York City and Washington, D.C.

The sale completion is the company’s second in two weeks. In late August, NiSource completed the sale of its exploration and production subsidiary, Columbia Energy Resources (CER), to Triana Acquisition LLC, an affiliate of Morgan Stanley Capital Partners. The sale primarily consisted of Columbia Natural Resources (CNR) and its 1.1 Tcf of natural gas reserves.

Triana agreed in July to purchase all of the stock of CER for $330 million in cash (see NGI, July 7). Triana also agreed to deliver the approximately 94 Bcf remaining under forward sales contracts through 2006.

NiSource has retained ownership of Columbia Gas and Columbia Gulf Transmission systems in its Columbia Energy Group, along with five Columbia distribution subsidiaries that provide natural gas to approximately 2.1 million residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky and Maryland.

Merrillville, IN-based NiSource also distributes natural gas to approximately 770,000 customers in northern Indiana through three subsidiaries: Northern Indiana Pubic Service Co. (Northern Indiana), Kokomo Gas and Fuel Co. and Northern Indiana Fuel and Light Co., Inc. Additionally, NiSource’s subsidiaries Bay State and Northern Utilities, Inc. distribute natural gas to more than 329, 000 customers in Massachusetts, Maine and New Hampshire. NiSource operating companies deliver energy to more than 3.7 million customers stretching from the Gulf Coast through the Midwest to New England.

©Copyright 2003 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.