Sep 29, 2004 2 min read

GREENSBURG – (Dow Jones/AP) – Allegheny Energy Inc. will sell a Manhattan, Ill., power plant to a private investment firm for about $173 million. The Hagerstown, Md., power company Tuesday said the sale of the 672-megawatt Lincoln facility, and the “potential sale of our other Midwest assets” would reduce debt, bolster earnings and help the company regain “financial strength.”

The buyer is Boston-based ArcLight Capital Partners LLC, which specializes in buying energy assets.

Allegheny Energy expects to take a $130 million charge on the sale in the third quarter. The sale is expected to close in the fourth quarter. The energy company also plans to take a third-quarter impairment charge of about $280 million on the impairment of two Indiana and Tennessee natural gas-fired peaking facilities.

Excluding charges related to the sale and the impairment of two other Midwestern natural gas-fired peaking facilities, Allegheny Energy expects to post a profit in the third quarter.

In last year’s third quarter, Allegheny Energy posted a loss of $51 million, or 40 cents a share, on revenue of $637.6 million. As of June 30, Allegheny Energy had $5.28 billion in long-term debt, and cash and cash equivalents of $306.7 million.

New York Stock Exchange-listed Allegheny Energy shares traded early afternoon at $16.03, up 6 cents.

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