Diversified power provider
NRG Energy Inc
) subsidiary, Saale Energie GmbH ("SEG"), sold 41.9% of its
ownership stake in Schkopau, a 900 Megawatt coal-fueled power
station, situated near Halle, Germany, to Czech Republic-based coal
mining and electricity company, Energeticky A Prumyslovy Holding
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The plant, Kraftwerk Schkopau GbR, was collectively owned by SEG
and its German partner E.ON Kraftwerke GmBh. SEG also held 44.4% of
Kraftwerk Schkopau Betriebsgesellschaft mbH, the facility's
The Czech energy company purchased NRG Energy's interest in the
power plant at a price of EUR141 million. NRG expects to realize
net proceeds of roughly $174 million prior to the end of 2012.
The Schkopau plant burns lignite from the Profen Mine held by EPH's
MIBRAG unit for energy supply. EPH had earlier purchased NRG's
integrated coal mining and power generating unit, MIBRAG, in 2009.
The divestiture of the non-core asset is part of NRG's long-term
strategy of focusing on its retail electric business in core
domestic markets. This will enable the company to divert the sale
proceeds for meeting capital requirements in its fast growing
renewable business. Besides, the gain from this sale will aid in
expanding NRG's investment options and will positively influence
NRG has with this sale completely exited the European market. This
lowers the company's exposure to the volatile European financial
market and the continuing debt crisis.
NRG Energy's closest competitor
The AES Corporation
) has entered into two agreements to divest a significant portion
of its businesses in China for an aggregate amount of $134 million.
The deal is anticipated to close in the latter half of 2012.
Although the company did not provide any earnings guidance for
2012, it retained its cash flow expectation in the range of $800
million to $1,000 million. The Zacks Consensus Estimates for the
second quarter and 2012 are currently pegged at 21 cents per share
and 87 cents per share, respectively.
Based in Princeton, New Jersey, NRG Energy is a wholesale power
generation company engaged in the ownership, development,
construction, and operation of power generation facilities.
The company is also involved in the trade of fuel and
transportation services and the sale of energy, capacity, and
related products in the United States and internationally. The
company presently has a Zacks #2 Rank which translates to a
short-term Buy rating.