Dominion Announces Sale of Two Natural Gas Utilities for $910 Million
Dominion (NYSE: D) today announced that it plans to sell its Dominion Peoples and Dominion Hope natural gas distribution companies to Babcock & Brown Infrastructure Fund North America (BBIFNA), a San Francisco-based infrastructure fund that owns and manages utilities and other infrastructure assets, for $910 million, subject to changes in working capital and levels of capital expenditures, under an agreement expected to close in 2009.
Thomas F. Farrell II, Dominion chairman, president and chief executive officer, said:
"Dominion Peoples and Dominion Hope are well-run utilities with highly skilled employees and excellent assets serving outstanding communities. We look forward to working with BBIFNA to make this a smooth and timely transition for everyone involved.
“We also look forward to continuing our strong business, volunteer and philanthropic involvement in Pennsylvania and West Virginia. Through our other operations in those states at Dominion Transmission, Dominion Exploration & Production, Dominion Retail and Dominion Generation, we will be an active member of the community.”
Dominion Peoples serves about 359,000 residences and businesses in Pennsylvania from its headquarters in Pittsburgh, and Dominion Hope serves about 115,000 residences and businesses in West Virginia from its headquarters in Clarksburg, W.Va. Together, they serve approximately 12 percent of Dominion’s 4 million electric and natural gas utility customer accounts in the mid-Atlantic and Midwest.
Because income from Dominion Peoples and Dominion Hope is excluded from the company’s operating earnings, Dominion maintains its 2008 operating earnings guidance of $3.05 per share to $3.15 per share and its 2009 operating earnings outlook of $3.25 per share to $3.40 per share. As previously stated, Dominion plans to use all after-tax proceeds, expected to be approximately $675 million, when received, to reduce debt.
The agreement is subject to regulatory approvals in Pennsylvania and West Virginia as well as clearance under the federal Hart-Scott-Rodino Act and under the Exon-Florio provision of the Omnibus Trade and Competitiveness Act.
Dominion engaged Goldman Sachs as its financial adviser in the transaction. McGuireWoods LLP provided legal services to Dominion in the transaction.
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