Dynegy sells assets to LS Power for $1 billion

Loss making US power company, Dynegy agreed to sell some of its power plants to LS Power, its former partner, for $1.025 billion in cash plus 245 million Class B shares held by LS Power in order to increase the company's liquidity and enable it to pay near-term debts.

The deal announced yesterday will enable Dynegy to significantly enhance its strategic and financial flexibility as well as transform its shareholder composition into a 100 percent publicly held company by eliminating the dual-class stock structure.

Houston, Texas-based Dynegy is a power generating company with a capacity of over 17,700 megawatts (MW). The company's key regions are Midwest, Northeast and Westcoast and its portfolio consists of power plants fueled by coal, fuel oil, and natural gas.

Through the deal LS Power will get Dynegy's nine power plants including five peaking power plants (that generally run only when there is peak demand for electricity), three combined-cycle plants and Dynegy's remaining interest in a project under construction in Texas.

LS Power will also receive $235 million principal amount of 7.5 percent senior unsecured notes due 2015.

The transaction is expected to close in the second half of 2009, subject to customary clearances and regulatory approvals.