Aus & NZ: Macquarie Infrastructure to sell Bayonne Energy Center for USD 900m

30 July 2018 - 12:00 am UTC

New York-listed Macquarie Infrastructure reached a deal to sell the Bayonne Energy Center in New Jersey for USD 900m.

The newly expanded 644MW gas fired power project will be acquired by an unknown buyer, according to a 29 July statement. 

The sale, which values the New Jersey power plant at USD 1,400 per kilowatt of generating capacity, is expected to close in the final quarter of 2018, subject to regulatory approvals.

Both the 512MW Bayonne Energy Center plus the newly completed 132MW expansion project, BEC II, are being sold.

Advising MIC on the sale was Guggenheim Securities (financial), according to a previous storyin Inframation ​​​​​​.

The sale comes after minority shareholder Moab Capital Partners staged an open revolt against MIC in April, claiming the asset manager knowingly kept investors in the dark about International Matex Tank Terminal’s (IMTT) declining performance before an earnings call in February and suggested an outright sale of the entire company.

The New York based investor also opposed MIC’s plan to use funds from the sale of Bayonne to repurpose some IMTT tanks, as reported.

MIC’s chief executive Christopher Frost said now was the right time to sell the power plant which exclusively sells its output to New York City through a dedicated subsea transmission cable.

“Having completed various capacity and capability expansion projects at BEC, we concluded that this was an appropriate time to sell the facility and redeploy the proceeds to address strategic priorities including strengthening our balance sheet,” he said in a statement.

The asset manager says it will use some of the net proceeds of around USD 650m to slash debt including USD 150m outstanding on the revolving credit facility at the IMTT business and to fund growth capital deployments.

MIC expects its ratio of net debt to EBITDA to be less than 4.5 times at year end 2018.

The power plant has a tolling agreement to sell roughly 62.5% of its 512MW energy and capacity to Centrica’s Direct Energy with a remaining term of about 10 years.