AEP cuts Kentucky operations sale deal value by $200 mln, extends timeline

Algonquin Power & Utilities

30/09/2022 14:39

Sept 30 (Reuters) - American Electric Power  AEP.O  said
on Friday it would sell its Kentucky operations at about 7%
lower enterprise value of $2.65 billion to a unit of Algonquin
Power & Utilities Corp  AQM.TO   AQN.N  compared with the
original deal. 
    AEP expects to receive about $1.2 billion in cash, net of
taxes and transaction fees, instead of its original estimate of
$1.45 billion.
    The sale to Algonquin's unit, Liberty, which was originally
set to close in the second quarter of 2022, is now expected to
be finalised in January 2023 pending approval from the U.S.
energy regulator, the companies said on Friday. Liberty is the
regulated utility business of Algonquin Power.
    Columbus, Ohio-based AEP also said it expects a
third-quarter pre-tax loss ranging from $180 million to $220
million due to the lower deal value and extended timeline, but
added that its operating earnings forecast would not be
impacted. 
    Brett Mattison, president and chief operating officer (COO)
of AEP's Kentucky Power, has been named president and COO of
Southwestern Electric Power Company, effective Jan. 1, the power
company said.
    AEP and Algonquin had announced the original deal in October
last year. AEP's Kentucky operations include Kentucky Power, a
utility that serves 165,000 customers and Kentucky Transco, a
regulated transmission business.
 (Reporting by Ankit Kumar;
Editing by Vinay Dwivedi)
 ((Ankit.Kumar2@thomsonreuters.com;))