With the intention to stream line, emphasise portfolio optimisation and increase proceeds through selling non-core assets, in 4Q15 Peabody Energy launched a competitive biding process in preparation for the company to sell the subsidiary holding its 5.06% share of the Prairie State Energy Campus.
Prairie State is a 1600 MW coal-fired electricity generation plant and adjacent coal mine in Washington, St. Clair and Randolph counties in Illinois. It began operations in 2012 and is one of the cleanest coal-fired plants in the US and the lowest-cost coal plant in one of the world's largest energy and operating reserve markets.
Peabody has now entered into a definitive agreement with the Wabash Valley Power Association to sell the share for US$57 million, subject to certain customary closing adjustments.
It is expected that the end of 2Q16 will be when the transaction closes ¬– subject to certain governmental and regulatory approvals, expiration of purchase rights and other customary conditions.
It is reported Peabody intends to use transaction proceeds for general corporate purposes and/or deleveraging activities, and expects to record see a modest gain related to the sale.
The planned sale of the Prairie State interest, along with other recently announced or enacted transactions, would bring total proceeds from asset sales to nearly US$500 million since the beginning of the second quarter of 2015.
In the fourth quarter, Peabody entered into a definitive agreement to sell its New Mexico and Colorado assets for US$358 million in cash. The transaction would bring forward multiple years of cash flows and release the company of approximately US$105 million of liabilities.
The company's planned completion of the sale of the Wilkie Creek mine and other associated assets in Queensland's Surat Basin has been delayed and remains highly dependent on successful financing by the proposed purchaser.
During the last three quarters of 2015, the company realiSed cash proceeds of nearly US$70 million related to its ongoing resource management activities through the sale of surplus land and coal reserves.
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/coal/22012016/peabody-to-sell-its-coal-fired-project-in-illinois-93/