COLUMBUS, Ohio, March 2, 2004 — American Electric Power (AEP) has completed the sale of its 70 percent interest in Nanyang General Light Electric Company Limited, which owns and operates a power plant in China.
AEP sold its interest to Henan Power for $34.5 million. Henan Power currently owns 15 percent of Nanyang General Light. Nanyang City Hengsheng Development Co. owns the remaining 15 percent. Prior to closing, Nanyang General Light paid off the $26.2 million balance on a loan from AEP.
Nanyang General Light owns and operates two 125-megawatt coal-fired generating units located in central China near Nanyang City in Henan Province. The plant began commercial operation in 1999.
Proceeds from the sale, part of AEP’s plan to divest of assets that don’t fit the company’s long-term strategy, will be used to reduce debt and strengthen the balance sheet. The sales price approximates the current book value and is not expected to have a material impact on 2004 GAAP earnings.
“We’re pleased to have closed this transaction well before the mid-year target we had set,” said Michael G. Morris, AEP chairman, president and chief executive officer. “This demonstrates our commitment to complete the divestitures as quickly as possible and return our focus to our strong domestic utility operations and other strategic domestic assets.”
AEP announced last month that it had signed a definitive agreement to sell LIG Pipeline Co. and its subsidiaries for $76.2 million. The company also has completed the sale of various smaller holdings as it continues to shed assets that don’t fit its long-term strategy.
“We still have work to do,” Morris said, noting that AEP’s operations in the United Kingdom, the Jefferson Island gas storage assets in Louisiana and other smaller holdings remain on the list of assets to be sold. “We expect the UK assets to be sold toward the end of the year, although — as we’ve shown with the transaction in China — we will work to complete the sale earlier, if possible.
“Each divestiture makes it easier for investors to focus on the continued strong earnings from our utility operations, the core of our long-term strategy,” Morris said.
American Electric Power owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. AEP is also one of the largest electric utilities in the United States, with almost 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.