Public Service Enterprise Group Incorporated (NYSE: PEG) revealed that it has decided to divest Fossil Generating Portfolio to ArcLight Capital. The firm has inked an agreement with ArcLight Capital after which the Fossil Generating Portfolio will be acquired by ArcLight. The firm has divested its 6,750-megawatt fossil generating portfolio for $1.92 billion.
In a link with the deal, starting in the Q3 of 2021, the assets and liabilities of PSEG Fossil will be categorized as assets arranged for sale. As a result, PSEG anticipates recording a pre-tax impairment charge of about $2,150 million to $2,225 million, employee severance and retention costs more than $25 million, etc.
Furthermore, In conjunction with the sale of its Solar Source assets in June, PSEG is expecting to obtain nearly $2.15 billion of after-tax net profits. The sale of PSEG Fossil is related to the Strategic Alternatives process of PSEG. It has been revealed in July 2020 and encompasses 13 generation units in New Jersey, Connecticut, Maryland, and New York.
Moreover, PSEG is revising its full-year 2021 non-GAAP operating earnings guidance to $3.50 to $3.65 per share, from $3.40 to $3.55 per share. It indicates the termination of depreciation expense and lowers interest expense associated with the sale of the PSEG Fossil assets and settlement of PSEG Power’s unpaid debt.
In addition to this, PSEG is on the right track to achieve a more conventional earnings profile. Further, this deal renews its development in the direction of a clean energy infrastructure-focused business that will allow its progressively more low-carbon economy. It is anticipated that the deal will be finalized late in the fourth quarter of 2021 or the first quarter of 2022.