Shell and Bechtel Agree to Sale of InterGen

Shell Generating (Holding) B.V., a subsidiary of The Royal Dutch/Shell Group, and Bechtel Enterprises Energy B.V., a subsidiary of Bechtel Group, Inc., have signed an agreement to sell InterGen N.V. and 10 of its power plants to a partnership between AIG Highstar Capital II L.P. and Ontario Teachers' Pension Plan for $1.75 billion.

Shell owns 68 percent of Intergen, with the rest held by privately owned engineering and construction firm Bechtel.

This transaction includes 10 power stations in 6 countries (UK, the Netherlands, Mexico, Australia, the Philippines, and China) together with the corporate offices and management capabilities.

Excluded from the sale are InterGen's assets in the United States, Colombia, and Turkey, which will be reorganised prior to financial closing and retained by Shell and Bechtel pending further review. The transaction is expected to close mid-2005 and is subject to certain conditions and regulatory approvals.

InterGen currently has interests in 17 plants in operation in 9 countries (UK, Mexico, Colombia, Australia, Philippines, USA, Turkey, China, and the Netherlands), with a total of 9.3 gigawatts of installed capacity (InterGen equity share). InterGen has corporate offices near Boston, Massachusetts, and employs some 650 staff worldwide.

The InterGen business has been sold as a going concern. InterGen as sold has approximately $2.7 billion of debt in its consolidated subsidiaries, and the buyer will assume any related obligations. InterGen's proportion of the debt in its unconsolidated subsidiaries, as sold, is approximately $0.4 billion.

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Posted 20/04/05

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