Dynegy Gains on Plan to Boost Balance Sheet, Improve Ebitda

  • Power producer plans $400M in balance sheet improvements
  • CEO Robert Flexon to speak at investor conference Sept. 29

Dynegy Inc. gained the most in six weeks after the Houston-based electricity producer said it plans another $400 million in balance-sheet improvements.

The incremental savings over three years are part of an initiative which, from 2011 through the end of 2015, will have produced more than $280 million in earnings before interest, taxes, depreciation and amortization and over $958 million in balance sheet savings, Dynegy said in a statement after the market closed Thursday.

Chief Executive Officer Robert Flexon will participate in a panel discussion at the Wolfe Power & Gas Leaders Conference on Sept. 29 in New York.

Dynegy’s announcement follows its $6.25 billion purchase of power plants in
April from Duke Energy Corp. and Energy Capital Partners. EBITDA will be $250
million a year higher than expected after three years, 19 percent above a June forecast, Jonathan Arnold, a New York-based analyst for Deutsche Bank AG, said in a telephone interview Friday.

“People anticipated they would have more to say about efficiency but it
definitely wasn’t expected last night,” said Arnold, who rates the stock at
buy and owns none. Flexon probably will give more detail in next week’s panel
discussion, Arnold said.

Shares rose 5 percent to $20.67 in New York trading, the steepest one-day gain since Aug. 12. Dynegy is down about 28 percent in the past year.

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