CMS Energy to Sell Australia Plant

JACKSON, Mich. -- - CMS Energy said recently it and two partners have reached a conditional agreement to sell the Loy Yang power plant and adjacent coal mine in Australia to an international consortium for about $2.4 billion.

CMS Energy owns 49.6 percent of the 2,000-megawatt Loy Yang project. NRG Energy Inc. and Horizon Energy Australia Investments each own about 25 percent.

The purchasing entity, Great Energy Alliance Corp., was formed earlier this year by Australian Gas Light Co., Tokyo Electric Power Co. and a group of investors led by the Commonwealth Bank of Australia.

The sale's completion is contingent on several conditions, including a restructuring of Loy Yang's debt and regulatory approval.

Loy Yang's brown coal-fired plant is the largest generator in Victoria, Australia, accounting for 24 percent of the state's electricity generation. The CMS-led partnership bought the complex for $3.8 billion in 1997 as Australia privatized its electric industry.

CMS Energy, one of the nation's largest combination gas and electric utilities, has completed or announced more than $3.8 billion in asset sales, including assumed debt, during the past 18 months.

CMS has been working to rid itself of oil and gas operations to concentrate on its utility business and reduce debt. It hopes to raise $900 million this year in net proceeds from asset sales.

On Wednesday, CMS said it had completed the sale of its CMS Field Services subsidiary to Cantera Natural Gas Inc. The sale involved about $112.6 million in cash and a $50 million note payable from 2005 through 2009.

CMS sold the 11,000-mile Panhandle natural gas pipeline that runs from the Gulf of Mexico to the midwest and Canada for $1.8 million last month.

CMS shares fell 22 cents to close at $7.77 in abbreviated pre-holiday trading Thursday on the New York Stock Exchange.