FirstEnergy (FE) - Get FirstEnergy Corp. Report reportedly is working with advisers to sell a near 20% stake in its transmission business with an eye to raising some $2.5 billion from the potential sale as it seeks to settle a recent state corruption case.
Citing people familiar with the matter, Bloomberg reported that the utility was in discussions with infrastructure funds and sovereign wealth funds to purchase the stake. No final decision has been made and FirstEnergy could elect to not sell the stake.
FirstEnergy’s transmission operations include more than 24,000 miles of lines.
Akron, Ohio-based FirstEnergy recently agreed to pay $230 million, the largest criminal penalty ever imposed by the U.S. Attorney’s Office for the Southern District of Ohio, as part of an agreement with federal prosecutors over a corruption case involving a $1 billion state bailout for nuclear power plants.
Under a deferred-prosecution agreement, FirstEnergy admitted that it conspired with public officials and others to pay millions of dollars in bribes.
On FirstEnergy’s second-quarter earnings call last month, Chief Financial Officer Jon Taylor said the company was considering selling a minority stake in its distribution or transmission assets to raise money.
The company is "intently focused on fostering a strong culture of compliance and ethics, starting at the top, and ensuring we have robust processes in place to prevent the type of misconduct that occurred in the past," CEO Steven Strah said on the call.
At last check, FirstEnergy shares were down 0.04% at $37.86. They ended the trading day Tuesday down 0.02% at $36.85. The stock has risen 28% year to date.