AKRON, Ohio, July 10, 2018 /PRNewswire/ -- FirstEnergy
Solutions Corp. ("FES") announced today that it has agreed to sell its retail and wholesale load-serving business to
Constellation, a subsidiary of Exelon Corporation (NYSE: EXC), for a purchase price of $140 million
in cash, subject to certain purchase price adjustments. FES has approximately 900,000 Commercial & Industrial and Residential
customers in six states in the Midwest and Mid-Atlantic, primarily Ohio and Pennsylvania and serves 41 terawatt-hours of electricity load.
The transaction with Constellation does not include the transfer of (i) FES cash collateral posted with various counterparties
or (ii) FES working capital. In total, FES expects to realize total cash proceeds of approximately $280
million, subject to certain purchase price adjustments, including the return of cash collateral and collection of retained
net working capital.
The sale will be accomplished pursuant to a court-supervised Section 363 bankruptcy auction process. FES has filed a
motion with the Bankruptcy Court overseeing its chapter 11 cases for approval of auction and bid procedures that will permit
other interested parties to submit competitive bids for the retail and wholesale load serving business.
The sale is subject to receipt of other necessary approvals, including Hart-Scott-Rodino. If approved, the companies expect to
close the transaction in the fourth quarter of 2018.
Throughout the sale process, FES will continue to supply energy and service to all customers without interruption. "We believe
this transaction is another important step in our restructuring plan," said Kevin Warvell, Vice
President and Chief Financial Officer of FES. "If approved, we will work with Constellation to ensure the transition of customer
accounts is seamless. During the sale process, our daily operations will continue as usual, and we will continue to provide our
customers with the uninterrupted service they demand. Taking care of customers is and will remain our number one
priority."
"This agreement would provide an opportunity to grow our retail business in strategically attractive markets where we're best
suited to match load served with Exelon generation assets," said Mark Huston, President of
Constellation's National Retail Business. "FirstEnergy Solutions has a reputation for delivering value to customers, and our
combined business would continue that tradition with a broad array of energy products and services at competitive prices."
FES, its subsidiaries and FirstEnergy Nuclear Operating Company on March 31, 2018, filed
petitions under Chapter 11 of the Federal Bankruptcy Code to facilitate an orderly financial restructuring. The case is
proceeding in U.S. Bankruptcy Court for the Northern District of Ohio, in Akron. Additional information can be found at https://cases.primeclerk.com/FES.
Akin Gump Strauss Hauer & Feld LLP is serving as legal counsel and Lazard is serving as investment banker to FES with
respect to this sale and during FES's chapter 11 restructuring.
About Constellation
Constellation is a leading competitive retail supplier of power, natural gas and energy products and services for
homes and businesses across the continental United States. Constellation's family of retail
businesses serves approximately 2 million residential, public sector and business customers, including more than two-thirds of
the Fortune 100. Baltimore-based Constellation is a subsidiary of Exelon Corporation (NYSE:
EXC), the nation's leading competitive energy provider, with 2017 revenues of approximately $33.5
billion. Learn more at www.constellation.com or
on Twitter at @ConstellationEG.
View original content:http://www.prnewswire.com/news-releases/firstenergy-solutions-corp-enters-into-stalking-horse-agreement-to-sell-its-retail-and-wholesale-load-serving-business-to-constellation-300678982.html
SOURCE FirstEnergy Solutions