Baltimore-based power-generating Company, Constellation Energy Group Inc. is slated to acquire Boston Generating LLC by offering an amount of around $1.1 billion.
If the agreement becomes successful, it will be Constellation's biggest bid ever and other Companies will have to quote much higher price in order to obtain the assets.
Boston Generating LLC is a private Company, which is under too much debt. As per Standard & Poor’s Ratings Services, the Company is thinking of filing for bankruptcy protection by fall. The Company in April went for a planned sale process in order to reorganise it.
It is noteworthy that Boston Generating is the third-biggest electricity-generating firm in the New England area and it produces 2,950 megawatts of electricity, which is enough to light up 2.4 million homes.
Constellation said that it had reserves of $1 billion for acquirement and future investments. The company went down 9 cents to $30.16 at 4:01 p. m. during New York Stock Exchange stock trading.
Although, Constellation’s second-quarter income surged because of previous year’s divestiture losses, yet the in-service returns for retail energy business went down.
Constellation also mentioned that it would use cash-on-hand and debt method to pay the plants and the purchase will add up to the Company’s revenue, which will start in 2011.
According to the Chairman of Constellation, “This agreement is consistent with Constellation Energy’s previously stated intention to purchase physical generation assets in regions where we have significant load obligations”.