NRG Energy Inc. has announced plans to buy most of bankrupt independent power producer Edison Mission Energy's (EME) assets for more than $2.6 billion.
Under the deal, NRG will acquire EME's diverse generation portfolio, which consists of nearly 8 GW of capacity located throughout the U.S. In fact, NRG says EME's 1.7 GW of wind power will nearly quadruple its existing wind generation capacity.
"Edison Mission Energy is a great fit with NRG, as virtually 100 percent of their assets, their particular expertises and the balance of their technologies deployed complement NRG's own assets, personnel and businesses," says David Crane, president and CEO of NRG Energy.
On Dec. 17, 2012, EME and several of its subsidiaries filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code, and EME was deconsolidated from parent company Edison International. (In March 2013, long-time joint-development partner Midwest Wind Energy cited EME's financial troubles as a main reason it chose to sell most of its own portfolio.)
The acquisition and transactions contemplated in the purchase agreement will be consummated as part of an EME Chapter 11 plan, which each of the company's major stakeholders has agreed to support and pursue.
"We are pleased to have reached this agreement with NRG, which maximizes the value of our company for all of our stakeholders and paves the road for our emergence from Chapter 11," comments EME President Pedro Pizarro, adding that all of EME's energy facilities will continue normal operations throughout the process.
In connection with the transaction, NRG says it will assume non-recourse debt of approximately $1.55 billion, of which $273 million is associated with assets designated as non-core assets pursuant to the asset purchase agreement.
NRG expects to close the transaction in the first quarter of 2014. In addition to the approval of the bankruptcy court, the deal is subject to customary closing conditions.