NRG to Reduce Debt, Cut Costs
September 18 2015 - 11:20AM
Dow Jones News
Power producer NRG Energy Inc. on Friday unveiled a series of
moves to cut down on debt, buy back shares, and raise cash through
an asset sale, as the company faces pressure over its expensive
clean-energy businesses.
NRG said it has agreed to sell a 75% stake in its portfolio of
wind farms to its majority-owned affiliate company, NRG Yield Inc.,
for $210 million. NRG has been able to "drop down" projects with
long-term, predictable cash flows to NRG Yield.
Separately, in an investor presentation, NRG said it plans to
spend $1.3 billion on reducing debt and buying back shares through
2016, including $250 million in share repurchases this year.
It also plans to cut $150 million in costs starting next
year.
Shares of NRG, down 31% this year, fell 3.7% to $18.47 a share
in early trading. NRG Yield shares ticked up 0.6% to $14.96 a share
after losing 34% of their value this year.
NRG, the nation's largest independent power producer, has
recently moved to adopt a greener business model in recent
years.
Once known for coal and nuclear generation, NRG is now a leader
in the development of renewable power ranging from gigantic wind
farms to rooftop solar panels on individual suburban homes.
But the company's corporate structure has grown complex and its
balance sheet bloated, while its "green" businesses have been
expensive.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 18, 2015 11:05 ET (15:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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