Business & Finance
Business and Finance
Business and Finance
Wed, February 4, 2009
Tue, February 3, 2009 Constellation Energy to Sell Downstream Gas Business
BALTIMORE--([ BUSINESS WIRE ])--Constellation Energy (NYSE:CEG) today announced it has reached a definitive agreement to sell its Houston-based downstream natural gas unit to Macquarie Group (ASX:MQG). Terms were not disclosed.
The pending divestiture is one of several strategic initiatives the company has undertaken in recent months to reduce risk in its merchant businesses and improve liquidity through the return of posted collateral. The agreement is subject to standard terms and conditions, and is expected to close in the second quarter of 2009.
In a related transaction, Constellation Energy and Macquarie Cook Energy, Macquarie Group's existing North American gas trading business, announced that they have signed a letter of intent under which Macquarie Cook Energy would supply natural gas to Constellation Energy's Louisville, Ky.-based retail gas division, Constellation NewEnergy Gas.
"The pending sale of our downstream natural gas business and the recently announced divestiture of our international commodities business illustrate that we are making substantial progress in de-risking our business and rightsizing our merchant businesses in light of current economic conditions," said Mayo A. Shattuck III, chairman, president and chief executive officer of Constellation Energy. "Completion of these transactions will meaningfully improve our near-to-mid-term liquidity position. We continue to assess the ongoing capital requirements of our merchant businesses with an eye toward reducing risk, stabilizing risk-adjusted returns and optimizing the value of our premier generation assets and leading customer supply businesses."
On Jan. 20, 2009, Constellation Energy announced the divestiture of its London-based international commodities unit to an affiliate of Goldman Sachs; the transaction is expected to close by the end of the first quarter of 2009.
The company will provide a comprehensive update of its current and projected liquidity and collateral positions as part of its 2008 fourth quarter and full year earnings conference call on Feb. 18, 2009.
About Constellation Energy
Constellation Energy ([ www.constellation.com ]) is a leading supplier of energy products and services to wholesale and retail electric and natural gas customers. It owns a diversified fleet of generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity, and is among the leaders pursuing the development of new nuclear plants in the United States. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. A FORTUNE 500 company headquartered in Baltimore, Constellation Energy had revenues of $21 billion in 2007.
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.
