PERRYVILLE, La., May 5, 2003 — Cleco Corp. announced it has signed a letter of intent to sell its 725-megawatt power plant in Perryville, La., to an Entergy subsidiary.
The letter of intent was signed May 2 for Cleco’s wholly owned subsidiary, Perryville Energy Partners LLC (PEP), to sell the plant. PEP owns the natural gas-fired plant, which consists of a combined-cycle unit and a simple-cycle unit. PEP was a successful bidder in Entergy’s fall 2002 request for proposals to supply power.
“We’re pleased by the success of our bid and the progress of talks concerning the sale of our Perryville plant. While there are a number of issues that need to be settled, we believe the transaction can be completed before year-end,” Cleco President and CEO David Eppler said.
The sale is contingent upon execution of a definitive purchase agreement, obtaining necessary approvals from state and federal regulators, completion of a due diligence review by Entergy, and the settlement of various project-related contracts. In addition, an agreement was signed terminating a 20-year tolling agreement for PEP upon completion of the sale to Entergy.
“Assuming everything is finalized as expected, we intend to use the proceeds from these transactions to pay down debt at the corporation,” Eppler said. “Completion of the sale reinforces our balance sheet, and it will significantly diminish exposure to the less stable wholesale energy business.
“We project the transactions will generate positive cash flow of between $50 million and $60 million and will reduce our projected 2003 earnings by approximately $0.10 per share.”
Cleco Corporation is an energy services company headquartered in Pineville, La. It operates a regulated electric utility that serves approximately 260,000 customers across Louisiana. Cleco also operates a wholesale energy business that has approximately 2,100 megawatts of generating capacity. For more information about Cleco, visit www.cleco.com.