Florida Water Services Sells Seven Systems for $296 M
ALLETE, Inc. announced that its subsidiary, Florida Water Services Corp., agreed to sell seven of its Florida water and wastewater systems to governmental entities in Florida for $296 million payable at closing, resulting in an after-tax gain of $55 million. The sale is expected to close by the end of 2003 pending satisfaction of certain contingencies and regulatory approvals in Florida.
The water systems to be sold through this purchase agreement include those serving the counties of Osceola, Hernando, Citrus, Lee and Charlotte, and the communities of Marco Island and Palm Coast. The cash proceeds after transaction costs, retirement of Florida Water debt, and payment of income taxes are estimated at $158 million, and will be used to retire debt at ALLETE.
The purchase agreement was signed by representatives of Florida Water Services and the acquiring communities and represents about two-thirds of Florida Water's assets. Florida Water Services continues to work with local governments interested in purchasing remaining water systems. If interested governmental entities cannot be found, the remaining systems will be sold to a private buyer.