Dynegy Inc. (NYSE:DYN)’s share rose by 8.75% on August 22, 2014 after the company announced acquisition of coal assets from Duke Energy Corp (NYSE:DUK) and Energy Capital Partners. The company is planning to purchase coal and gas generation assets worth $6.25 billion from these two companies.
According to the official statement released by Dynegy Inc (NYSE:DYN), company will acquire 12,500 MW of coal and gas generation, which will double its portfolio nearly 26,000 MW. Dynegy Inc will purchase asses worth $2.8 billion from Duke Energy Corp (NYSE:DUK) and $3.45 billion from Energy Capital Partners.
According to the CEO and President of Dynegy Inc (NYSE:DYN), Robert C. Flexon,
“The two acquisitions announced today are both exceptionally high quality portfolios that have been well managed and run by Duke and ECP employees. The addition of these portfolios transforms Dynegy by adding considerable scale in the PJM and New England markets.”
He further added, “The addition of these portfolios is forecasted to significantly improve our financial outlook by tripling our 2015 Adjusted EBITDA and being massively accretive to Adjusted EBITDA and Free Cash Flow per share in 2015 and beyond.”
The company is planning to offer new unsecured notes worth $5 billion along with equity and equity linked securities worth $1.25 billion. Further, the company also has $950 million from incremental revolving credit facilities giving it a total credit capacity of $1.425 billion.
It is a positive step for Dynegy Inc (NYSE:DYN), a company that nearly went bankrupt in 2012. The company reported $38 million as its consolidated adjusted EBITDA for the second quarter 2014 with cash flow of $163 million from operations. The company increased its 2014 adjusted EBITDA range guidance to $330-$380 million range.
This article has been written by Prakash Pandey and edited by Serkan Unal.