Dynegy Divests Lee Facility For $180 Million To Lower Debts
Zacks Investment Research | Oct 12, 2017 10:38PM ET
Dynegy Inc. (NYSE:DYN) announced the closure of $180 million sale of its Lee Energy Facility to an affiliate of Rockland Capital, in Illinois. The deal has received approvals from the Federal Energy Regulatory Commission.
Per the aforementioned deal, proceeds generated will be utilized toward debt reduction purposes.
What Caused Dynegy’s Debt Levels to Rise?
Since 2013, Dynegy has increased scale and shifted portfolio mix, from a coal-based portfolio to a gas-based one, with the support of several acquisitions. All of these were funded through a significant portion of the company’s existing debt. This caused considerable stress to the company’s balance sheet structure.
Since then, the company has been working consistently to reduce its outstanding debt level. Additionally, it has been taking steps to maintain a diverse liquidity program to support ongoing operations and commercial activities by issuing notes.
Focus on Debt Reduction
Going forward, Dynegy is primarily focused on debt reduction, which is anticipated mainly from operating cash flows. Further, PRIDE initiatives and asset sales will aid in maintaining a healthy balance sheet, while managing debt maturities and improving leverage position.
The company exited with total long-term debt of $9.2 billion as of Jun 30, 2017 compared with nearly $8.8 million at the end of 2016. Soon after, it completed the sale of its Dighton & Milford energy facilities to Starwood Energy Group Global for approximately $119 million, proceeds of which were used toward paying off debt. (Read more: Zacks Investment Research
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