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Reliant To Sell Channelview Plant For $468 Million

Feb 25, 2008 (financialwire.net via COMTEX) -- February 25, 2008
(FinancialWire) Reliant Energy (NYSE: RRI) has agreed to sell its Channelview Cogeneration Plant and related contracts to an affiliate of Kelson Energy for $468 million.

According to Reliant, the transaction should provide value to Reliant for its equity interest in the project as well as resolve the bankruptcy proceedings that began in August 2007 when four subsidiaries related to the Channelview plant filed for Chapter 11 bankruptcy protection.

Proceeds from the sale will be used to settle the claims of secured creditors, including around $379 million of debt, accrued interest and make-whole payments as of January 31, 2008. It will also be used to pay the claims of unsecured creditors and a cash-sharing agreement. Residual proceeds will be retained by Reliant.

The sale is subject to several closing conditions, including the approval of the court overseeing the bankruptcy.

Kelson Energy is an independent power producer that currently owns or leases four combined-cycle gas-fired facilities located in the Southwestern and Southeastern regions of the United States. They have an aggregate total capacity of 4,002 megawatts.

Houston-based Reliant Energy provides electricity and energy services to retail and wholesale customers in the United States. In Texas, the company provides service to more than 1.8 million retail electricity customers, including residential and small business customers and commercial, industrial, governmental and institutional customers.

Reliant also serves commercial, industrial, governmental and institutional customers in the Pennsylvania, New Jersey and Maryland market.

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Source: Comtex Wall Street News