Wednesday, August 27, 2008

Entergy deal good for shareholders; others wary

Power provider Entergy Corp. is advancing its plans to spin off nuclear plants that generate free-market electricity, a deal that may be a boon for shareholders but a potential burden for taxpayers, according to critics. If approved by regulators, Enexus Energy Corp., to be based in Jackson, Mississippi, will become a separate, publicly traded company in the next several months. Stockholders of New Orleans-based Entergy would receive Enexus shares on a pro-rata basis. The exact number has not been determined. But there is concern over debts of as much as $4.5 billion that the new company would take on, including up to $3.5 billion paid to Entergy for the plants and other assets. There is also the dismantling or mothballing of nuclear reactors at the end of their life spans, hich critics say Enexus may be unable to pay. That could leave taxpayers with billions in cleanup costs should the company become insolvent. The plants range in age from 32 years to 37 years.
International Herald Tribune

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