Ameren Corp, the American power company, will be selling off its merchant generation business to Dyegen Inc. This sale is to retain the company's focus on rate regulated transmission operations for electricity and natural gas as well as remove US$825 million in debt from its balance sheet.
The merchant generation business is named Ameren Energy Resources Co would be creating US$900 in benefits, together with tax benefits amounting to US$180 million. About US$133 million of the proceeds would be used to purchase three natural gas fueled plants back after being previously offloaded. Dynegy would not be paying cash for the acquisition.
With Dynegy, there will be an additional 4.2 gigawatts of coal generating capacity in Illinois. According to Ameren CEO Thomas Voss, "We expect that this transaction will reduce business risk and improve the predictability of our future earnings and cash flows, which is expected to strengthen Ameren's credit profile and support Ameren's dividend."
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