Workmen atop a Jamaica Public Service Company pole. Mirant is also selling its 80 per cent stake in the Jamaican power utility. - File

Mirant Corporation on Tuesday cemented a deal to sell six of its power plants to an American investor. Ratings agency Standard & Poor's (S&P) said the deal did not affect the utility's credit rating.

Together, the plants have a capacity of 3,619 MW.

"The net proceeds to Mirant from the sale after extinguishing $83 million of project-level debt are expected to be $1.324 billion," said the company in a statement.

The Atlanta-based company agreed to sell the natural gas-fired plants, located throughout the United States, for about US$1.407 billion to LS Power Equity Partners, a 16-year-old American company. The deal was part of the plan to divest its U.S., Asian and Caribbean assets and use the proceeds to buy back stock.

Proceeds to be reinvested

Proceeds of about US$500 million from the sales of the Zeeland and Bosque plants will be reinvested in or used to retire debt at Mirant North America, a subsidiary of Mirant Americas Generation, the company said.

"Although these plants do not fit within our business strategy, they are excellent facilities," said Edward Muller, Mirant chairman and CEO.

S&P rates the credit of both Mirant and its two U.S. subsidiaries B+ on negative watch.

Mirant shares rose 25 cents to US$33.23 Tuesday on the New York Stock Exchange and continued to trade higher during the week. Its early morning price Thursday was US$33.44.

Philippines assets sold

The power company has already sold its Philippines assets to consortium Tepco-Marubeni for US$3.42 billion, and plans to wrap up deals for its Caribbean plants, including its 80 per cent stake in the Jamaica Public Service Company Limited (JPS), by July.

The company paid Jamaica US$201 million for control of JPS in 2001, with a commitment to spend US$500 million in a decade to install another 400 megawatts of generating capacity.

By 2005, JPS had installed 140 MW with plans for another 120 MW by 2008. It announced last year that the plant would be coal-fired.

business@gleanerjm.com

The plants sold:

Zeeland