Jan 3, 2003 1 min read

HAGERSTOWN, Md. (AP) – Allegheny Energy Inc. said Thursday that it has sold two of its businesses to Constellation Energy Group for $22.3 million. The deal relieves struggling Allegheny of $60 million in financial obligations, spokesman Guy Fletcher said.

The units are Fellon-McCord and Associates, which specializes in energy consulting and management services, and Alliance Energy Services, which provides natural gas supply and transportation services to other businesses. Both are based in Louisville, Ky.

Constellation is based in Baltimore.

As a result of the transaction, Allegheny was relieved of $54 million worth of loan guarantees it had committed to Alliance Energy, and $6 million it had pledged to the unit as working capital, Fletcher said.

The deal strengthens Allegheny’s balance sheet as it strives to avoid bankruptcy due to the downturn in energy trading. The Hagerstown-based company is negotiating with lenders on a new credit agreement. Allegheny lost $334.4 million in the nine months ended Sept. 30. Allegheny provides electricity and natural gas to about 1.7 million customers, or 3 million people, in parts of Maryland, Ohio, Pennsylvania, Virginia and West Virginia.

On the Net:

Allegheny Energy Inc.: http://www.alleghenyenergy.com