MORRISTOWN, N.J., Dec. 13, 2010 - Covanta Holding Corporation (NYSE: CVA) (the "Company" or "Covanta"), today announced that it has agreed to sell all of its interests in the Quezon coal-fired electric generation facility located in the Philippines to Electricity Generating PCL ("EGCO") for a price of approximately $215 million in cash. EGCO is a current partner in the Quezon project and we expect the transaction to close in the first quarter of 2011, subject to customary approvals and closing conditions.
In June of this year, Covanta announced plans to sell its equity interests in four fossil fuel facilities in the Philippines, India and Bangladesh. Quezon is the first sale from that effort and represents a significant majority of the value of these non-core assets. Commenting on the transaction, Anthony Orlando, Covanta's President and CEO stated that, "We are pleased to be selling our interest in Quezon to our partner in the venture, EGCO. Quezon is a world-class asset and the valuation reflects its strong potential going forward."
The Quezon assets being sold consist of the Company's entire interest in Covanta Philippines Operating, Inc., which provides operation and maintenance services to the facility, as well as its approximately 27% ownership interest in the project company, Quezon Power, Inc. ("QPI"). The sale is expected to generate a one-time after tax book gain of approximately $140 million at closing. For the twelve months ended September 30, 2010, Quezon's contribution to Covanta's consolidated results was: $2.8 million of revenue, $19.5 million of Adjusted EBITDA, $15.9 million in Free Cash Flow and $0.12 of diluted earnings per share(1).
Speaking about intended uses of the proceeds, Sanjiv Khattri, Covanta's EVP and CFO stated that, "Consistent with our June announcement regarding capital allocation and return of capital to shareholders, we anticipate using all of the sale proceeds that can be repatriated tax efficiently to return capital to our shareholders; we estimate this amount to be in excess of $100 million."
Discussions with prospective buyers for the three remaining assets in India and Bangladesh continue. The Company is committed to achieving a fair valuation and plans to retain any or all of them if fair value cannot be achieved in a timely manner.
Citi has been retained to assist in the sale of the non-core assets.
Covanta Holding Corporation (NYSE: CVA) is an internationally recognized owner and operator of large-scale Energy-from-Waste and renewable energy projects and a recipient of the Energy Innovator Award from the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy. Covanta's 44 Energy-from-Waste facilities provide communities with an environmentally sound solution to their solid waste disposal needs by using that municipal solid waste to generate clean, renewable energy. Annually, Covanta's modern Energy-from-Waste facilities safely and securely convert approximately 20 million tons of waste into more than 9 million megawatt hours of clean renewable electricity and create 10 billion pounds of steam that are sold to a variety of industries. For more information, visit www.covantaholding.com.
Electricity Generating PCL ("EGCO") was the first independent power producer in Thailand. EGCO is currently considered to be one of the premier independent power companies in Southeast Asia with a range of power generation facilities under management and extensive operation, maintenance and related power plant services capabilities. The Company's portfolio is comprised of power generation assets with gross capacity of 7,300 MW. These facilities are situated in Thailand, the Philippines, and Laos PDR. EGCO's fleet has a fuel mix comprised of natural gas, coal, hydropower, biomass and solar. For more information on the group, please visit egco.com.
SOURCE Covanta Holding Corporation
Marisa F. Jacobs,
Associate, Media Relations and Corporate Communications,
Web Site: www.covantaholding.com