NRG Sees Buyers Circling for Renewables Unit Amid Cost-Cut Plans

7.18.17

NRG Energy Inc. says buyers are hungry for the company’s renewable-energy business as the power generator looks to cut debt and sell assets under pressure from billionaire investor Paul Singer.

Almost a week after the largest U.S. independent power producer disclosed that it’s looking to slim down, the company is seeing “robust engagement from a variety of potential co-sponsors or sponsors” for its clean-energy units, Craig Cornelius, senior vice president of renewables, said in a phone interview Tuesday. NRG is moving to shed as much as $4 billion of assets, including a stake in its NRG Yield Inc. yieldco, as part of a deal with Singer’s Elliott Management Corp. and turnaround titan C. John Wilder’s Bluescape Energy Partners.

“In almost every dimension, it’s a pretty substantial renewable-energy enterprise,” Cornelius said. “It exceeds the scale of anything that’s going into a process like this.”
NRG is pursuing a sale at an opportune time. While yieldcos -- companies formed to own assets with predictable cash flows -- have amassed little equity in the public markets recently, a large and deepening pool of buyers covets the assets they own: wind and solar farms that benefit from long-term contracts with utilities. These buyers include pension funds and insurance companies with long-term liabilities that neatly dovetail the utility contracts.

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