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Allegheny Generating closes sale of 59% stake in Va. hydroelectric facility


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Allegheny Generating closes sale of 59% stake in Va. hydroelectric facility

Allegheny Generating Co. completed the sale of its 59% stake in the Bath County hydroelectric plant in Virginia to Aspen Generating LLC for net proceeds of $355 million, subject to customary post-closing adjustments, according to a May 9 regulatory filing.

The sale was part of a broader transaction under which Allegheny Energy Supply Co. sold four gas-fired plants in Pennsylvania to the LS Power Group affiliate for net proceeds of about $390 million in December 2017 and Allegheny Generating sold a 50% interest in the Buchanan gas facility in Virginia for roughly $20 million in March.

Following the deal closing, Allegheny Energy Supply gave notice of an optional redemption of its approximately $305 million of senior notes, and Allegheny Generating optionally redeemed its $100 million of senior notes. As a result, the FirstEnergy Corp. subsidiaries were required to pay "make-whole" premiums to the noteholders totaling approximately $90 million.

Separately, FirstEnergy, FirstEnergy Solutions Corp., or FES, and FirstEnergy Nuclear Operating Co. reached a standstill agreement with FES creditors and the official committee of unsecured creditors in connection with FES' bankruptcy filing.

The parties agreed to keep the terms of their settlement open through Aug. 1 and agreed to other matters to facilitate an efficient settlement process, including expedited discovery protocols and transfer restrictions on the FES creditors, according to the filing.

Under the transfer restrictions, members of the FES creditors agreed that should they seek to sell any of their FES debtor-related debt, and a prospective buyer agrees to be bound by the terms of the standstill agreement, including support for the agreement in principle.

FirstEnergy and its subsidiaries reached the agreement in principle with FES creditors in April.