CMS Energy, NRG Energy and Horizon Energy Australia Investments signed a conditional agreement to sell the Loy Yang power plant and mine to Great Energy Alliance Corporation, Dow Jones Business News reported.
CMS Energy owns 49.6% of the 2,000-megawatt Loy Yang project and NRG Energy and Horizon Energy Australia Investments each own about 25%.
Great Energy Alliance Corp consists of Australian Gas Light Company (AGL), Tokyo Electric Power Company and a group of investors led by the Commonwealth Bank of Australia.
Both AGL and Tokyo Electric will hold a 35 percent minority stake in the plant, with the Commonwealth Bank-led investors holding the rest.
According to the Dow Jones report, the sale has several conditions to be met, including a restructuring of Loy Yang's debt and regulatory approval.
The mine and Victoria’s biggest power plant, which supplies 24% of the state’s electricity, mines the Morwell brown coal seams in the Latrobe Valley. Seams vary in thickness from 1.3 to 1.7 metres.
It is estimated the mine has a life span of 50 years with reserves of 1,500Mt.
CMS has been working to sell oil and gas assets to raise $900 million this year to reduce debt and concentrate on its utility business, Dow Jones reported.