Macquarie Led Group Wins Approval From Louisiana Acquiring Cleco For $3.4 Billion
By Staff Writer
The Louisiana Public Service Commission (PSC) has approved on Monday selling of Pineville based utility owner Cleco Corporation. A group of investors led by Macquarie Infrastructure and Real Assets (MIRA) intends to acquire the utility service provider for $3.4 billion. With the approval gets pronounced, Cleco finds no other obstacle to move from public to private.
The decision from the commission has been approved through 4-1 votes after a hefty process involving a year and a half. The recent decision over-rides the former ruling delivered last month rejecting the sale, reports The Town Talk.
Earlier, Cleco and the investor group have announced an enhanced commitments package on Monday. Both Cleco and Macquarie have agreed not to request an increase in customer rates before June 2019.
The other commitments include rate credits averaging $500 per customer. The total credit amount has been increased to $136 million replacing previously announced credit of $100 million, according to a report published in Nasdaq.
However, both the parties have approached for getting approval from PSC for the second time. The commission panel has rejected the takeover during last month citing absence of best interests for the Cleco customers in the proposed deal. The rejection speaks in favor of critics' claims for intense regulatory opposition seeking for more concession-offerings to the consumers, reports Bloomberg.
Opponents of the deal argue that the debt added to Cleco as part of the deal may expose the utility company to long-term financial risks. If the debt risk harms the company in future, the Cleco customers will have to bear the burden through paying in higher rates, caution the opponents.
Cleco's customers have been committed an exceptional value, cite both Cleco and Macquarie. Macquarie, the Sydney based largest private operator of US utility assets in collaboration with other investors have agreed acquiring Cleco for $55.37 a share in cash in October, 2014.
The other investors include Canadian fund manager British Columbia Investment Management Corp. and John Hancock. In the midst of regulatory turmoil centering acquisition, buyers are seeking the steady, long term returns from the regulated power assets.
Cleco sells power to around 287,000 homes and businesses in Louisiana. Meanwhile, Cleco has already managed acquisition approval from the US Federal Energy Regulatory Commission and clearance from the Committee on Foreign Investment in the U.S.
Pineville based utility owner Cleco Corporation now observes no hurdle in getting private since the Louisiana PSC approves concerned acquisition deal on Monday. A group of investors led by Macquarie has reached an agreement to acquire Cleco in October, 2014. But opposition from the state administration has delayed the proposed acquisition.