US-based Macquarie Infrastructure (MIC) has agreed to sell its 644MW power generation facility Bayonne Energy Center (BEC) in New Jersey to an undisclosed buyer for nearly $900m in cash and assumed debt.
BEC is a gas-fired and a mid-merit electricity generation facility, constructed in 2012 and further expanded this year.
The facility supplies electricity to New York City through a cable that runs beneath New York Harbor to a substation situated in Brooklyn, New York.
In 2015, MIC acquired BEC and is currently operated by its International-Matex Tank Terminals (IMTT) business.
The transaction, which is subject to receipt of customary regulatory and other approvals, values BEC at approximately $1,400/kW of generating capacity.
MIC chief executive officer Christopher Frost said: “Having completed various capacity and capability expansion projects at BEC, we concluded that this was an appropriate time to sell the facility and redeploy the proceeds to address strategic priorities including strengthening our balance sheet.”
MIC intends to use part of the net proceeds, nearly $650m, to reduce debt including $150m outstanding on the revolving credit facility at its IMTT business.
The remaining amount will be used by the company to fund a portion of MIC’s planned growth capital deployments.
Additionally, the MIC Board will consider options for returning any excess capital to the company’s shareholders.
The completion of the deal is expected to take place during the fourth quarter of this year.