El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Merchant Energy Announces Sale of 25 Domestic Power Plants
HOUSTON, TEXAS, January 16, 2004—El Paso
Merchant Energy, a business unit of El Paso Corporation (NYSE:EP),
today announced that it has agreed to sell 25 domestic power generation
facilities to Northern Star Generation LLC, a wholly-owned subsidiary of
AIG Highstar Generation LLC, for approximately $746 million plus the
assumption of approximately $174 million of consolidated non-recourse debt,
as of December 31, 2003. Northern Star Generation LLC and AIG Highstar
Generation LLC are units of AIG Global Investment Group (AIGGIG).
AIGGIG is acquiring these assets on behalf of its private equity funds,
affiliated companies, and third party clients. AIG Financial Products Corp.
(AIGFP) is providing the acquisition financing. AIGGIG comprises a group of
international investment adviser companies which provide advice, investment
products and asset management services to clients around the world.
These power generation facilities are located in seven states across the
country with a net generation capacity of approximately 1,850 megawatts.
AIGGIG Chairman and CEO, Win Neuger, commented that "we are excited
about acquiring these assets as they comprise stable long term cash flows
principally with investment grade rated utilities. In addition, AIGFP
provides us with proprietary monetization capabilities for these assets to
realize attractive upside."
"We are very pleased with this transaction, which is a major step
in the execution of our long-range plan," said Doug Foshee, president
and chief executive officer of El Paso. "So far we have announced or
closed $2.3 billion of the $3.6 billion to $3.9 billion targeted under the
plan, and we expect additional progress in the first quarter."
This transaction represents a significant portion of El Paso's
domestic power portfolio, and the transaction is expected to close during
the second quarter of 2004. The sale is subject to customary conditions,
including the receipt of Hart Scott Rodino approval and other regulatory
approvals. The proceeds from the sale will be used for debt repayment and
general corporate purposes.
Lehman Brothers advised the buyer, while Banc of America Securities LLC
served as El Paso's advisor.
An asset sales tracking report is now available on the company's
website, at www.elpaso.com under the investor relations resources section.
El Paso Corporation's purpose is to provide natural gas and related
energy products in a safe, efficient, dependable manner. The company owns
North America's largest natural gas pipeline system and one of North
America's largest independent natural gas producers. For more information,
the attached table of asset sales information by clicking here.
This release includes forward-looking statements and projections, made
in reliance on the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The company has made every reasonable effort
to ensure that the information and assumptions on which these statements
and projections are based are current, reasonable, and complete. However, a
variety of factors could cause actual results to differ materially from the
projections, anticipated results or other expectations expressed in this
release, including, without limitation, the ability to implement and
achieve our objectives in the long-range plan; the successful
implementation of the settlement related to the western energy crisis;
actions by the credit rating agencies; the successful close of our
financing transactions; our ability to successfully exit the energy trading
business; our ability to divest of certain assets; changes in commodity
prices for oil, natural gas, and power; inability to realize anticipated
synergies and cost savings associated with restructurings and divestitures
on a timely basis; changes in reserves estimates based upon internal and
third party reserve analyses; general economic and weather conditions in
geographic regions or markets served by El Paso Corporation and its
affiliates, or where operations of the company and its affiliates are
located; the uncertainties associated with governmental regulation; the
uncertainties associated with the outcome of governmental investigations;
the outcome of pending litigation including shareholder derivative and
class actions; political and currency risks associated with international
operations of the company and its affiliates especially due to the
instability in Brazil and economic conditions in Mexico; difficulty in
integration of the operations of previously acquired companies,
competition, and other factors described in the company's (and its
affiliates') Securities and Exchange Commission filings. While the company
makes these statements and projections in good faith, neither the company
nor its management can guarantee that anticipated future results will be
achieved. Reference must be made to those filings for additional important
factors that may affect actual results. The company assumes no obligation
to publicly update or revise any forward-looking statements made herein or
any other forward-looking statements made by the company, whether as a
result of new information, future events, or otherwise.