CMS Energy is reportedly in talks with fellow US power group, Duke Energy International, over the sale of its 50 per cent interest in the Loy Yang A power facility in Victoria.
CMS Energy said on Friday it was continuing to negotiate a definitive agreement on the sale of its share in Loy Yang. CMS Energy did not provide details on the discussions but a source familiar with the negotiations today confirmed it was Duke Energy.
Duke Energy has already flagged its intention to expand its investment in Australia, indicating in August that it planned to double its local assets to $A3bn billion ($1.5 bn) over the next few years. A Duke Energy International spokeswoman would not confirm or deny the speculation. “I can’t elaborate at this point,” she said today.
CMS has been looking to sell its stake in Loy Yang for nearly two years, writing down its investment last December after it was unable to find a buyer. The sale of Loy Yang is part of a strategy by CMS Energy to concentrate its growth plans on North America to reduce its business risk.
CMS Energy, along with Horizon Energy Investment Group Ltd and NRG Energy, bought Loy Yang for $A4.8 billion in 1997 during the privatisation of the state’s electricity assets under the reign of former Victorian premier Jeff Kennett. The ASX-listed Horizon and NRG both own 25 per cent of Loy Yang.
Horizon shares added as much as 12.5 per cent today, hitting an intra-day high of 27 cents before closing up one cent to 25 cents.