TECO Guatemala Holdings LLC sells its interest in Guatemalan electric distribution company
TECO Energy subsidiary held a 30 percent ownership interest in Distribución Eléctrica Centro Americana II S.A. (DECA II), the consortium with majority ownership of Empresa Eléctrica de Guatemala S.A. (EEGSA) in Guatemala.
TAMPA, October 21, 2010
TECO Guatemala Holdings LLC (TECO Guatemala) today announced that, along with Iberdrola Energía S.A. of Spain (Iberdrola) and EDP - Energias de Portugal S.A. (EDP), it has closed on the sale of DECA II to Empresas Públicas de Medellín E.S.P. (EPM) for a total purchase price of $605 million in cash, plus assumption of existing debt.
DECA II is a holding company in which Iberdrola held a 49 percent interest, TECO Guatemala indirectly held a 30 percent interest and EDP held a 21 percent interest. The DECA II consortium holds an 80.9 percent ownership interest in EEGSA and other affiliated companies. EEGSA is the largest Guatemalan distribution utility in the country and serves Guatemala City and surrounding areas.
TECO Energy CEO John Ramil said, "We have been very clear with our investors that the domestic utility business is TECO's core strategy with our unregulated businesses providing good value. This transaction is consistent with that strategic focus."
TECO Guatemala’s portion of the total purchase price is $181.5 million.
TECO Guatemala President Phil Barringer said, "Today’s announcement allows TECO Guatemala to continue our focus on generating reliable electricity for the residents of Guatemala through our two remaining power generation assets."
TECO Guatemala will continue to own and operate its San José and Alborada power stations.
- The San José Power Station, in operation since 2000, was the first coal-fired plant in Central America and generates base load power for the country year around. It meets environmental standards set by Guatemala and the World Bank. The plant capacity is committed under a power sales agreement through 2014, with an optional five-year extension.
- TECO Guatemala’s Alborada Power Station is an oil-fired peaking generation facility that is committed under a power sales agreement through 2015. The facility provides quick-start emergency power.
Citi provided certain financial advisory services to TECO Energy in connection with the transaction.
TECO Energy, Inc. (NYSE: TE) is an energy-related holding company. Its principal subsidiary, Tampa Electric Company, is a regulated utility in Florida with both electric and gas divisions (Tampa Electric and Peoples Gas System). Other subsidiaries include TECO Coal, which owns and operates coal production facilities in Kentucky and Virginia, and TECO Guatemala, which is engaged in electric power generation in Guatemala.