In the News
CPV In the News -2008
- MAY 8, 2008
CPV Asset Management enters into agreement with North American Energy Alliance following Industry Funds Management acquisition of Con Edison generation portfolio
May 08, 2008
INDUSTRY FUNDS MANAGEMENT COMPLETES FIRST STAGE OF CON EDISON ELECTRICITY GENERATION PORTFOLIO ACQUISITION
-- Portfolio Includes Facilities in Maryland, Massachusetts, New Hampshire and New Jersey; Total Purchase Price of $US1.477 Billion --
NEW YORK AND MELBOURNE MAY 8, 2008 -- Industry Funds Management Pty Ltd ("IFM"), one of the largest global infrastructure investment managers, today announced the completion of the first stage of its acquisition of a portfolio of U.S.-based power generators from Consolidated Edison, Inc. ("Con Edison"). The first stage of the acquisition comprises five power generating facilities with 1,181 MW of generating capacity. The acquisition was made through a newly created entity, North American Energy Alliance ("NAEA"), which is wholly owned by IFM International Infrastructure. The second stage of the acquisition, which is scheduled to close in late June, relates to the Newington Power Station, a 525 MW combined cycle facility in New Hampshire. The total cash purchase price for the portfolio is $US1.477 billion.
The complete portfolio includes 29 individual generating units at 12 different sites in the energy constrained Northeastern and Mid-Atlantic states of Maryland, Massachusetts, New Hampshire, and New Jersey. The assets are composed of modern, primarily gas-fired units that serve a range of demand requirements. The larger assets within the portfolio are capable of generating electricity with dual fuels (natural gas or liquids) and are thus able to generate electricity during periods of limited natural gas availability.
NAEA is to be led by CEO John McTear, former Vice President of Asset Management of Con Edison Development, and CFO Lars Bespolka, former head of Power and Project Finance for Asia-Pacific for Credit Suisse. NAEA has also entered into an asset management relationship with Competitive Power Ventures ("CPV"), a leading firm focused on the North American power generation market, which will provide additional expertise and advice to NAEA. The existing plant-level staff in the acquired portfolio will continue in their current roles, which is a reflection of the high standard of operations and adherence to safety demonstrated by the experienced operating team.
Kyle Mangini, Head of Infrastructure and Specialised Funds at IFM, commented: "The completion of the first stage of this acquisition is an exceptional accomplishment, particularly considering the difficult credit market conditions. This is an established, high quality portfolio of U.S. energy infrastructure assets that play a vital role in maintaining generation capacity in the region."
Dunia Wright, Head of US and Europe for Industry Funds Management added, "IFM is committed to investing in American infrastructure, and we plan to continue to invest significant capital in assets that support the economy. NAEA has tremendous experience in the operation and development of power stations. Its relationship with CPV enhances its ability to optimize assets, build on the existing base of capacity, and grow the business through its embedded expansion potential."
Energy generated by the portfolio of assets is largely contracted or hedged over the medium term, reflecting the IFM investment strategy of risk mitigation and predictable cash flow.
Financing for the transaction was underwritten by Barclays Capital, which worked closely with NAEA in structuring the balance sheet to reflect the conservative approach to leverage that is typical of an IFM investment. "Barclays has been an active contributor to building a credit facility that works well for the entity while being appealing to lenders joining the syndicate," added Mangini. Merrill Lynch and AllCapital acted as financial advisors to the transaction.
Head of US and Europe
Industry Funds Management (US), LLC
Phone: (212) 575-1055
Jim Fingeroth or Kimberly Kriger
Kekst and Company
Phone: (212) 521-4800
Phone: (03) 9657 4262
Mobile: 0432 796 888
Industry Funds Management Pty Ltd ("IFM"), is one of the largest global infrastructure investment managers. Headquartered in Melbourne, Australia, with offices in London and New York, IFM specializes in the management of private investment products across infrastructure, private equity, debt investments and listed equity portfolios. IFM manages over $A17.1 billion (US$16.1 billion) worldwide in its related products and services.
IFM has been an investor in infrastructure assets since 1995, and has completed 46 transactions in that 13 year period with approximately $A7.0 billion (US$6.6 billion) invested in the sector. Within the United States, IFM International Infrastructure has a direct investment in Duquesne Light Holdings and the Colonial Pipeline Company. IFM is owned by Industry Super Holdings Pty Ltd, the holding company for the Members Equity group of companies, which in turn is owned by 40 major Australian not-for-profit superannuation funds. For more information about IFM, please visit www.ifm.net.au.
The Con Edison portfolio comprises 29 individual generating units with an aggregate capacity of 1,706 MW. The power stations are located in Maryland Massachusetts, New Hampshire, and New Jersey, placing all of them in the capacity constrained Northeastern and Mid-Atlantic United States power market. Expansion opportunities for additional generating capacity exist and are potentially in the order of 1,000 MW.
The assets acquired include:
- Newington Energy LLC, a nominal 525 MW, combined cycle, dual fuel facility located in Newington, New Hampshire, north of the city of Portsmouth on approximately 20 acres. It operates within the service territory of Public Service of New Hampshire, New Hampshire's largest electrical utility within an industrial area.
- Consolidated Edison Energy Massachusetts Inc ("CEEMI") comprises 185 MW of generation capacity consisting of hydroelectric facilities, gas turbines and thermal (steam, turbine and boiler combination) units located in Western Massachusetts.
- CEEMI Expansion is a 96 MW facility that was established by Con Edison for the purpose of expanding the existing West Springfield (MA) Station electricity capacity.
- Lakewood is a nominal 246 MW combined facility located on 40 acres in Lakewood, New Jersey. Con Edison holds 80% of the ownership interests in this facility, with Osaka Gas holding the remaining 20%.
- Ocean Peaking is a nominal 351 MW peaking facility located on 15.8 acres in Lakewood, New Jersey.
- Rock Springs is a nominal 352 MW peaking facility located in Rising Sun, Maryland.