Dynegy Not Looking To Issue New Debt, No Near-Term M&A - CEO
December 17 2009 - 4:01PM
Dow Jones News
Dynegy Inc. (DYN) isn't looking to raise new debt or add more
power plants to its fleet following a recent deal with a one-time
development partner, its chairman and chief executive said
Thursday.
Earlier this month, the Houston-based power generator closed the
sale of nine U.S. power plants to LS Power Associates LP in
exchange for $1.03 billion in cash and 245 million Class B common
shares. Dynegy then announced it would buy back $830 million of
debt that matures in 2011 and 2012 with cash raised from the
deal.
In a phone interview, Dynegy's CEO Bruce Williamson also said
the company may "opportunistically" buy back additional debt as
management focuses on internal operations as the economy recovers
rather than external opportunities. Dynegy is a U.S. merchant
generator with plants in the Northeast, Midwest and West, selling
electricity at market prices rather than regulated rates.
"In the short run, we are focused internally on operating well
... It is less about looking out externally," Williamson said.
He said the company's deal with LS Power completed a process to
strengthen its balance sheet and improve the diversity of its
plants in terms of fuel, geography and how often they run. Although
the industry has seen increased plans by companies to shutter
coal-fire power plants, Williamson said Dynegy's plants are less at
risk because the company is nearing the completion of the clean-up
of their emission through scrubber equipment and the introduction
of low-sulfur western coal. He added the switch to Powder River
Basin coal also benefits Dynegy because of its lower costs,
especially amid weak natural gas and power prices.
"Our units are in a little better position," Williamson
said.
The deal with LS power simplified the company's capital, making
it easier to participate in a merger in the future. Although
Williamson still believes in industry consolidation, he said the
company has been focused on completing the LS Power deal, and
unlike some other generators, it isn't looking to add more plants
to its fleet through acquisitions.
Shares of Dynegy were recently trading up 4 cents at $1.90.
-By Mark Peters , Dow Jones Newswires; 212-416-2457;
mark.peters@dowjones.com
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