Dynegy buying 5 Illinois power plants from Ameren

Dynegy buying 5 Illinois coal power plants from Ameren; no cash payment

Associated Press

HOUSTON (AP) -- Power producer Dynegy is buying five coal power plants from utility Ameren to increase its power generation capabilities in Illinois.

Dynegy won't pay any cash for the plants and the related Ameren business that provides electricity to homes and businesses, but is assuming $825 million in Ameren's debt. Ameren said the value of its benefits from the deal also include tax gains and total about $900 million.

Ameren is buying three gas plants that are also in the subsidiary that it's selling to Dynegy for $133 million, meaning Dynegy will wind up with the cash. St. Louis-based Ameren still wants to sell the plants.

Dynegy, a Houston company that emerged from bankruptcy protection in October, said buying the Ameren plants will give it more than 8,000 megawatts of generating capacity in Illinois and nearly 14,000 megawatts in the U.S.

Ameren said the sale will allow it to focus exclusively on its rate-regulated electric, natural gas and power transmission operations. The deal also strengthens its balance sheet, and Ameren said it makes its business less risky.

The companies expect the acquisition to close in the fourth quarter.

Also on Thursday, Dynegy said its fourth-quarter loss narrowed to $107 million from $616 million in the same quarter a year ago. Revenue grew to $312 million from $130 million.

Ameren shares added 46 cents, or 1.4 percent, to $34.46 in morning trading, while Dynegy shares rose 82 cents, or 4.1 percent, to $21.

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