By Lisa Kerner
Charlotte, N.C., April 17 - Avista Corp.'s subsidiary, Avista Energy, Inc., entered into a definitive agreement to sell most of its contracts and ongoing operations to Coral Energy Holding, LP and some of its subsidiaries for book value in cash at closing.
The transaction is slated to close by late in the second quarter or early in third quarter of 2007.
The agreement also includes the sale of the operating assets of Avista Energy Canada, Ltd. to Coral Energy Canada Inc., a subsidiary of Coral Energy.
In addition, Avista Energy will liquidate other assets not sold or transferred to Coral Energy such as receivables, restricted cash and deposits.
Proceeds from these transactions are expected to be reinvested in Avista Corp.'s utility business.
"This transaction is the culmination of some very deliberate and strategic planning for Avista Energy and Avista Corp.," Avista Corp. chairman of the board and chief executive officer Gary Ely said in a company news release.
"We had three specific goals in mind - to make sure Avista Energy customers continue to receive the same high level of service they have come to expect, to ensure that our valued employees are treated fairly, and to realize a fair value for the business. The deal we've constructed with Coral meets those goals."
Avista Energy's headquarters in Spokane, Wash., and its offices in Great Falls, Mont., and Vancouver, B.C., are to remain, with most of the employees being offered employment by Coral Energy, the release stated.
Avista Energy is the energy marketing and trading company subsidiary of Avista Corp., which is involved in the production, transmission and distribution of energy.
Coral Energy is a Houston-based subsidiary of Shell Oil Co. that markets and trades natural gas, wholesale power and risk products.
| Acquirer: | Coral Energy Holding, LP
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| Target: | Avista Energy, Inc.
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| Transaction total: | Book value at closing
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| Announcement date: | April 17
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| Expected closing: | Second or third quarter of 2007
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| Stock price for target: | NYSE: AVA; $24.55 on April 16
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