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Calpine, NRG Energy Agree to Sell Assets

September 20, 2002|NANCY RIVERA BROOKS | TIMES STAFF WRITER

Calpine Corp. and NRG Energy Inc. reached deals Thursday to sell assets as part of the continuing scramble by ailing energy merchants to raise cash and strengthen their balance sheets.

San Jose-based Calpine said it agreed to sell its oil and gas properties in British Columbia for $248 million to Pengrove Corp. of Calgary, Canada. Pengrove will pay $148 million in cash and will buy $100 million of Calpine debt securities in the open market or through a tender offer.

Calpine retained the right to buy oil and gas from the properties, which the independent power plant builder obtained last year in its purchase of Encal Energy. That purchase was designed to secure fuel supplies for Calpine's plants.

NRG Energy, a subsidiary of Minneapolis-based Xcel Energy Inc., said it agreed to sell its interest in two California cogeneration power plants to separate buyers for a total of about $82 million in cash.

NRG said it would get about $72 million from the sale to an undisclosed buyer of its 57.7% stake in the Crockett cogeneration plant northeast of San Francisco. The sale also will reduce debt by about $242 million. NRG will receive $10 million from the sale of its 39.5% interest in the Bakersfield-area Mt. Poso cogeneration facility to Red Hawk Energy, which already owns a 23.5% interest.

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