US power producer NRG Energy Inc (NYSE:NRG) intends to get rid of 50% to 100% of its interest in NRG Yield Inc (NYSE:NYLD.A) and its renewables platform as part of a newly-announced transformation plan.
NRG Energy said in a statement it is well underway in a process to explore strategic options for its stake in NRG Yield, including the potential partial or full monetisation of the renewables platform. The objective is to optimise the way NRG participates in renewables, it noted.
The company also plans to offload 6 GW of conventional generation capacity. It expects to seal agreements with regard to the above-mentioned plan during the final quarter of the year. It has engaged Citi, Goldman Sachs and Morgan Stanley for certain asset sale processes.
As of March 31, NRG Yield’s net ownership of renewable energy assets included 1,999 MW of wind, 921 MW of utility-scale solar and 14 MW of distributed solar, as well as conventional power capacity.
A Business Review Committee (BRC) developed the “extremely detailed” transformation plan after conducting a four-month comprehensive review, NRG said. It is a three-part, three-year plan that targets nearly USD 1.1 billion (EUR 960m) in recurring cost and margin improvements by end-2018, USD 2.5 billion to USD 4 billion in net proceeds from asset sales, and the removal of USD 13 billion worth of total debt from the balance sheet.
“This plan is the result of a comprehensive review of our entire business by the board and management to simplify our business, right-size our portfolio and strengthen our balance sheet to create significant value for all our stakeholders,” said president and CEO Mauricio Gutierrez. The plan should help the company thrive through any market cycle, according to him.
(USD 1.0 = EUR 0.873)
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