6 September 2002 – US energy group Mirant today announced the sale of its 49 per cent economic interest in, and shared management control of, Western Power Distribution Holdings Limited and WPD Investment Holdings to PPL Corporation for $235m.
The WPD assets, in which PPL had a 51 per cent economic interest, include the electricity distribution networks for Southwest England and South Wales.
“This sale is part of Mirant’s ongoing review and sale of non-strategic assets designed to strengthen our balance sheet and improve liquidity,” said Marce Fuller, president and chief executive officer, Mirant. “Earlier this year we announced two phases of asset sales that would total between $2.3bn and $2.6bn. With this sale, we have raised over $1.7bn towards our goal.”
In Mirant’s 2002 second quarter earnings call, the company announced a $284m write-down of WPD reflecting the estimated fair market value of the asset at that time. The sale will result in an additional loss of $42m from the previously announced figure, resulting in a total loss of $326m on the sale.
Mirant purchased 100 per cent of South West Electricity Board (SWEB) in 1995, and between 1996 and 1998 sold 51 percent of the economic interest to PPL. In 2000, SWEB acquired Hyder, a Welsh water and electricity business. The water business was sold and the electricity business merged with SWEB to form WPD. Since December 2000, Mirant and PPL have shared management control of WPD.
The sale will result in approximately $228m in net proceeds to Mirant after payment of taxes and other transaction related fees.
WPD was Mirant’s final remaining investment in the United Kingdom.