Electric Company AEP and PNM Unload 50% Solar Stake for $230M in Strategic Shift
Portfolio Pulse from Lekha Gupta
American Electric Power Co Inc (AEP) and PNM Resources Inc (PNM) have agreed to sell approximately 50% of their stakes in New Mexico Renewable Development, LLC (NMRD) to Exus North America Holdings, LLC for $230 million. The portfolio consists of 15 solar projects totaling 625 megawatts. AEP's portion of the sale is about $115 million, and it anticipates netting approximately $104 million after taxes and fees. The transaction is expected to close in February 2024 and is not anticipated to materially impact financial results. The sale aligns with AEP's strategy to focus on core regulated operations and de-risk the company. The proceeds will help strengthen AEP's balance sheet and support efforts to provide safe, reliable, and affordable electricity. The sale is pending regulatory approvals.
December 26, 2023 | 2:23 pm
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NEUTRAL IMPACT
AEP is selling a 50% stake in NMRD for $115 million, expecting to net $104 million after adjustments. The sale is part of AEP's strategy to focus on regulated operations and is not expected to materially impact financial results.
The sale is part of AEP's strategic shift to focus on core regulated operations and de-risk the company. While the sale will provide a cash influx and strengthen the balance sheet, it is not expected to have a material impact on AEP's financial results, suggesting a neutral short-term impact on the stock price.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 80
NEUTRAL IMPACT
PNM Resources is part of the joint sale with AEP, divesting its 50% stake in NMRD to Exus North America Holdings, LLC for a total deal value of $230 million.
PNM's involvement in the sale is significant, but like AEP, the transaction is not expected to materially affect financial results. The strategic move to divest aligns with industry trends but is likely to have a neutral short-term impact on PNM's stock price.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 80