NRG to Sell Boston Energy Trading to Mitsubishi Diamond Unit

Updated on
  • Latest in $3 billion of sales announced in recent months
  • U.S. power generator pressured by billionaire investor Singer

NRG Energy Inc., the U.S. power generator pressured by billionaire investor Paul Singer to unload assets, agreed to sell Boston Energy Trading and Marketing LLC to Mitsubishi Corp.’s Diamond Generating Corp. for $70 million.

It’s the latest piece of about $3 billion in announced asset sales in recent months, according to a statement Thursday, and follows the $1.38 billion sale of most of its renewables assets to Global Infrastructure Partners. NRG expects about $3.2 billion in total divestitures.

NRG’s decision to streamline won over Wall Street. It was the best-performing stock on the S&P 500 last year. Once the sales are completed, NRG expects to rely more heavily on its retail operations.

As the company works to winnow its business, NRG missed the lowest estimate for adjusted earnings before interest, taxes, depreciation and amortization. It reported adjusted fourth-quarter Ebitda of $497 million Thursday, below analysts’ range of $517 million to $737 million, according to data compiled by Bloomberg.

Shares rose 6 percent to $27.47 at 9:38 a.m. in New York, the most since Nov. 3.

The trading and marketing unit handles energy management and energy trading in competitive U.S. power markets, and was once the power-marketing division of Edison Mission Energy, when it managed more than 10,000 megawatts of generation. Its sale is expected to be completed in the second half of this year.

Princeton, N.J.-based NRG took a $1.2 billion charge for 2017 related to its South Texas Project nuclear facility -- one of the nation’s largest -- “primarily due to the revised outlook of future commodity prices,” the company said in the statement Thursday.

Nuclear plants across the nation have struggled to compete with cheap supplies of wind and natural gas, prompting some states to pass measures subsidizing the units.

— With assistance by Meenal Vamburkar

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