— Electricity generator and marketer Reliant Resources, Inc., Houston, Friday said it arranged a $2.2 billion unsecured line of credit to help finance the acquisition of independent power producer Orion Power Holdings Inc.
Reliant Resources said it will fund the balance of the $2.9 billion purchase with cash on hand and a $1.6 billion existing line of credit. The acquisition, announced Sept. 27, is expected to close in the first quarter of 2002.
Stephen W. Naeve, Reliant Resources executive vice-president and chief financial officer, said the company was pleased with the response of the banking industry, “especially in view of the volatile capital markets environment in recent weeks.” He said “robust” demand by the banks increased the credit line to $2.2 billion from $1.8 billion.
Reliant Resources will acquire all the outstanding shares of Orion Power for $26.80/share and will also assume $1.8 billion of Orion Powerà¯¿½s net debt. The transaction is expected to immediately add to Reliant Resourcesà¯¿½ earnings. Based in Baltimore, Md., Orion has 6,500 Mw of electric generating capacity in operation or under construction.
Orion Powerà¯¿½s majority stockholders include Goldman, Sachs & Co. and its affiliates, Constellation Energy Group Inc., Mitsubishi Corp., and Tokyo Electric Power Co. International. The company was formed in 1998 to acquire, develop, own, and operate power generating facilities in North America’s deregulated wholesale markets.
Since its inception, Orion Power has invested over $4 billion in 81 power plants currently in operation with a total capacity of 5,926 Mw and an additional 5,000 Mw in construction and various stages of development.
Reliant Resources is a majority owned subsidiary of Reliant Energy Inc.