Business & Finance
Business and Finance
Business and Finance
Tue, January 20, 2009 Constellation Energy Enters into Definitive Agreement to Divest the Majority of its International Commodities Business
BALTIMORE--([ BUSINESS WIRE ])--Constellation Energy (NYSE:CEG) today announced it has reached a definitive agreement to divest the majority of its London-based international commodities business – including its coal and freight operations and European energy trading units – to an affiliate of Goldman Sachs. Terms of the transaction were not disclosed.
The pending disposition of the international commodities business is part of a previously announced strategic plan to increase the company's liquidity and reduce collateral requirements by divesting select merchant businesses. The company is also pursuing the sale of its Houston-based downstream natural gas trading unit.
"We are executing against our stated plans to de-risk our merchant business and increase liquidity by sharply reducing the collateral requirements associated with our commodities subsidiaries," said Mayo A. Shattuck III, chairman, president and chief executive officer of Constellation Energy. "The pending sale of our international commodities business is among several strategic initiatives we're pursuing in the months ahead to strengthen our financial position and transform our core business. Market conditions continue to be difficult, but we're actively reducing capital consumption and cash flow risk, and right-sizing the business to address the realities of the new financial and economic environment. Completion of these near-term activities should position Constellation Energy to earn solid risk-adjusted returns while reducing earnings risk and variability."
The international commodities business is primarily based in London and includes the company's coal and freight platforms, as well as its European-focused power, gas and carbon trading operations. The transaction is expected to close by the end of the first quarter of 2009 and is subject to certain regulatory approvals and other standard closing conditions.
About Constellation Energy
Constellation Energy ([ http://www.constellation.com ]), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.
Forward-Looking Statements
We make statements in this news release that are considered forward-looking statements within the meaning of the Securities Exchange Act of 1934. These include statements regarding expectations about our liquidity and the prospects for and anticipated benefits of our strategic initiatives. These statements are not guarantees of our future performance and are subject to risks, uncertainties and other important factors (including continued volatility in the credit, commodities and equity markets) that could cause our actual performance or achievements to be materially different from those we project. For a full discussion of these risks, uncertainties and factors, we encourage you to read our documents on file with the Securities and Exchange Commission, including those set forth in our periodic reports under the forward-looking statements and risk factors sections. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
