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Fitch comments on Reliant transaction
Fitch Ratings said it said that Reliant Energy Inc. announced that it is selling its Texas retail business to NRG Energy, Inc. for $287.5 million plus working capital.
The deal is expected to close in second-quarter 2009 and the company plans on using the net proceeds from the sale to reduce its secured debt, the agency said, adding that the transaction, should it close, would remove the huge potential collateral requirement associated with Reliant operating the retail business, and would resolve pending litigation with Merrill Lynch relating to Reliant's credit sleeve, which was in place to manage the collateral requirements of the retail business.
Following the closing of the transaction, Fitch said that Reliant should have fairly robust liquidity including over $1.5 billion in cash, and debt levels should approximate $2.9 billion, noting that the underperformance of the retail business in recent periods given weather and market related circumstances.
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