29 June 2005 — TransCanada Corp. today announced an agreement to sell its approximate 11 percent interest in PT Paiton Energy Co. to subsidiaries of The Tokyo Electric Power Co. for approximately US $103 million (approximately CDN $127 million). Paiton Energy owns two 615 MW coal-fired power plants in East Java, Indonesia. The transaction is expected to close in the third quarter of 2005, subject to various approvals.
“We’re pleased to have reached an agreement to sell one of our few remaining international assets,” said Hal Kvisle, TransCanada’s CEO. “This is another clear example of TransCanada’s disciplined approach in divesting non-core assets and redeploying the proceeds into our core businesses of gas transmission and power services in North America.”
TransCanada acquired its interest in Paiton Energy in 1996 and has retained that interest until favorable conditions for a sale were available.
Upon closing, TransCanada expects to realize an after tax gain of approximately CDN $115 million. This gain reflects the impact of a provision taken in 1999 against the carrying value of Paiton Energy. At that time, TransCanada announced its plan to make a staged exit from its international business and conducted a divestiture program during 2000 and 2001.