COLUMBUS (dpa-AFX) - American Electric Power (AEP) on Thursday agreed to sell its commercial barge transportation subsidiary, AEP River Operations LLC, to American Commercial Lines ('ACL'), owned by Platinum Equity, for about $550 million. The sale is expected to close in the fourth quarter of 2015.
AEP River Operations is a commercial inland barge company delivering about 45 million tons of products annually, including 10 million tons of coal. AEP River Operations has 56 towboats, 2,301 barges and 1,090 employees. The company is headquartered in Chesterfield, Missouri, with operations in Paducah, Kentucky, and Convent, Algiers and Belle Chasse, Louisiana.
AEP announced in March that the company was exploring strategic alternatives for AEP River Operations, including a potential sale. AEP acquired the business, formerly known as MEMCO, in 2001 from Progress Energy.
Upon close of the sale, ACL will acquire AEP River Operations by purchasing all the stock of AEP Resources, the parent company of AEP River Operations. ACL will assume all assets and liabilities of AEP River Operations.
AEP expects to net about $400 million in cash after taxes, debt retirement and transaction fees. The company will invest the proceeds in its regulated business. AEP expects to record a net gain of about $125 million from the sale in the fourth quarter of 2015.
AEP will retain ownership of its captive barge fleet that delivers coal to the company's regulated coal-fueled power plants owned by Appalachian Power, Kentucky Power and Indiana Michigan Power.
AEP is still conducting an independent strategic evaluation of its competitive generation business.
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