FirstEnergy (NYSE:FE) announced Thursday that it has agreed to sell an additional 30% equity stake in its FirstEnergy Transmission business to an affiliate of Brookfield Asset Management (NYSE: BAM) for $3.5 billion in cash.
FET is a holding company for three FirstEnergy (FE) Subsidiaries of FERC-regulated transmission companies – American Transmission Systems, Mid-Atlantic Interstate Transmission and Trans-Allegheny Interstate Line Company – which make up one of the largest transmission systems in PJM.
FirstEnergy ( FE ) will remain a 50.1% majority owner of FET following the closing of the deal, and FirstEnergy’s workforce will continue to operate the business; Brookfield Super-Core Infrastructure Partners, which bought 19.9% of FET in May, will own 49.9%.
FirstEnergy ( FE ) said the proceeds from the deal will be used to accelerate the improvement of its credit profile, after reducing its debt by $2.5 billion over the past year.
The company also raised its long-term growth plan for 2021-2025. to nearly $18 billion, an increase of ~$1.0 billion from the $17 billion target set in 2021.
FirstEnergy ( FE ) is positioned to deliver solid total returns over the next few years, even though its debt is a bit high, Power Hedge writes in an analysis recently published on Seeking Alpha.