Credit crunch may delay Entergy spin-off

Thursday, 30 October 2008

Entergy has said that its planned separation of its non-utility nuclear business from its regulated utility business through a tax-free spin-off may be postponed due to the current global financial crisis. In November 2007, the company announced plans to create Enexus Energy Corp to be a standalone owner of six of its current 11-reactor fleet. In addition, it plans to create another company, Equagen, to take operating responsibility for the Enexus' and Entergy's reactors. In a filing to the US Securities and Exchange Commission, Entergy said, "State regulatory decisions and financing are now the critical path. Entergy continues to target receiving regulatory decisions in the fourth quarter. However, due to unprecedented turmoil in the financial markets, it is uncertain whether or not financing fundamental to the spin-off transaction can be effected in the near-term." It added, "Entergy and Enexus stand ready to launch the financing when market conditions are favourable for such an issuance."