AEP to Acquire 4,000 Megawatts of Generation in UK
COLUMBUS, Ohio, Oct 8, 2001 /PRNewswire via COMTEX/ -- American Electric Power (NYSE: AEP chart, msgs), in a move to advance its European wholesale strategy, today agreed to acquire 4,000 megawatts of coal-fired generation in the United Kingdom from Edison Mission Energy, a subsidiary of Edison International (NYSE: EIX chart, msgs).
"The acquisition is consistent with the strategic objectives of our European business, which is to build a trading, marketing and optimization business across key aspects of the wholesale fuel and power generation value chain in Europe," said E. Linn Draper Jr., AEP chairman, president and chief executive officer. "We've been very successful in the U.S. with a strategy that links wholesale marketing and trading operations to generating assets. This acquisition allows us to replicate our successful U.S. wholesale model in the UK."
The acquisition is valued at US$960 million (UK 650 million pounds sterling) and will be immediately accretive to AEP's earnings by approximately $0.06 per share in 2002.
"We are paying approximately $200 per kilowatt for these assets, which is an attractive price based on current market conditions in the UK," said Hank Jones, senior vice president with AEP subsidiary AEP Energy Services. Jones heads the company's wholesale business in Europe.
AEP intends to fund the acquisition with a combination of short-term debt and non-recourse debt. Since it will generate sufficient cash flow after all debt service, the company anticipates credit ratings will not be impacted. The transaction is expected to be completed by the end of the year.
Assets acquired are:
* Fiddler's Ferry, a four-unit, 2,000-megawatt station on the River
Mersey in northwest England, approximately 200 miles from London; and
* Ferrybridge, a four-unit, 2,000-megawatt station located on the River
Aire in northeast England, approximately 200 miles from London.
The transaction also includes the fuel supplies associated with Fiddler's Ferry and Ferrybridge.
"AEP is the largest generator of electricity in the U.S. and has decades of experience operating large, efficient power plants like the ones being acquired from Edison Mission," Jones said. "These assets are currently well operated. We look forward to working with the plants' existing management and staff." |
