Sithe/PECO Agreement to Reduce Vivendi's Debt by 4 billion Euros
Sithe Energies Inc. has finalized a contract with PECO Energy Company for PECO to buy 49.9 percent of Sithe North America for approximately $680 million.
Once the contract has gone through, Vivendi will have a minority holding of about 30 percent and will no longer be Sithe's main shareholder.
The contract includes a clause that allows PECO/Exelon, Vivendi, Marubeni and the management to buy or sell their remaining Sithe North America shares within two to five years at a price that will be subject to certain market conditions, with a fixed minimum.
The sale will lead to the immediate removal of Sithe North America from Vivendi's scope of consolidation on the date of PECO's first purchase. Its impact on Vivendi's financial statements will be a reduction of total indebtedness by almost 4 billion euros. This sum is made up of an immediate reduction of 3.5 billion euros, to which will be added the proceeds from the sale of the balance of Vivendi's holding, amounting to about 450 million euros. Taking into account the earlier sale of its GPU assets, Vivendi's financial statements for 2000 will show capital gains of about 150 million euros linked to Sithe.
William Kriegel will remain as chairman and chief executive officer of Sithe. The transaction is subject to the usual conditions being met and is expected to be concluded within two months.
(Source: Vivendi Co.)