Reliant Energy (NYSE: RRI) said that it will not proceed with a $1 billion capital infusion, which was to have included a $650 million term loan from GS Loan Partners and a $350 million convertible preferred stock purchase by First Reserve Corp.
Reliant Energy announced today that it will not proceed with the GS Loan Partners or First Reserve financings previously announced.
At the time the company announced the financings, it was seeking capital to facilitate an accelerated unwind of the credit-enhanced retail structure with Merrill Lynch. Recently, Reliant made the decision to exit its commercial and industrial business, significantly reducing its long-term capital requirements. The company is currently pursuing a longer term unwind agreement with Merrill Lynch.
“We believe Reliant has adequate liquidity without the GS Loan Partners and First Reserve financings and this course of action creates more value for our shareholders,” said Mark Jacobs, president and chief executive officer, Reliant Energy.
As previously announced, Reliant’s board of directors is conducting a full review of strategic alternatives. The objective of this process is to consider a full range of possible strategic actions to determine the best alternative for enhancing stockholder value. The possible strategic actions include, but are not limited to, the sale of all or substantially all of Reliant Energy as well as the sale of some or all of its retail business.
Reliant Energy, Inc. (NYSE:RRI) based in Houston, provides electricity and energy services to retail and wholesale customers in the United States. The company provides service to approximately 1.8 million retail electricity customers primarily in Texas, including residential and small business customers. Reliant also serves commercial, industrial, governmental and institutional customers in Delaware, Illinois, Maryland, New Jersey, New York, Pennsylvania and Washington, D.C.
The company is one of the largest independent power producers in the nation with more than 14,000 megawatts of power generation capacity across the United States. These strategically located generating assets use natural gas, fuel oil and coal. For more information, visit http://www.reliant.com. Reliant routinely posts all important information on its Web site.