After being rejected in February, Cleco Corporation won approval from Louisiana Public Service Commission (LPSC) for its sale to a group of investors led by Macquarie Infrastructure and Real Assets (MIRA) and British Columbia Investment Management Corporation on Monday. The transaction, valued at $3.4 billion, is expected to close in April, Cleco said in a statement on its website.
Cleco owns Cleco Power, a regulated electric utility that reportedly sells power to about 287,000 homes and businesses in Louisiana. The utility “will continue to operate under the jurisdiction of the LPSC,” and will also remain headquartered in Pineville [Louisiana] and retain local management and existing headcount,” the company said in its statement.
“We are committed to ensuring that Cleco remains a strong, locally-based utility in the years ahead and are appreciative that the LPSC voted to approve this sale. We are confident that the utility will continue to provide reliable, high-level service to customers, the community and to the region,” Andrew Chapman, senior managing director of MIRA, said.
Additionally, customers of the utility will receive about $500 in rate credits on average, which amounts to $136 million, up from $100 million that had been announced earlier. Among other commitments for Louisiana’s development made by the company as a part of the deal, the utility can’t ask to raise rates till June 2019, and that increase will be effective July 2020.
“We did a pretty good deal here. They can’t ask for a rate increase until 2019 and can’t get the money until 2020,” LPSC member Foster Campbell said, before voting on the deal, the Sydney Morning Herald reported.
The sale was approved 4-1 by vote. The sole dissenting commissioner, Clyde Holloway, opposed the deal from the start, and after the vote, said in a statement: “Cleco as we know it has ceased to exist. It is now owned by a private foreign investment company that plans to flip it in 8-10 years. And that same private foreign investment company is financing the deal with a massive amount of debt and ratepayers’ tax money,” local NBC-affiliate KALB reported.
MIRA is the infrastructure arm of Australia-based Macqaurie Group, a global investment bank and financial services group.
Cleco shares closed Monday 0.43 percent higher on the New York Stock Exchange, before the LPSC approval, but zoomed about 13 percent in after hours trade.