Follow-on investment by Brookfield
Super-Core Infrastructure Partners strengthens FirstEnergy's
balance sheet, supports sustainable, long-term growth through
industry-leading Energize365 grid investment program
AKRON,
Ohio, March 25, 2024 /PRNewswire/ -- FirstEnergy
Corp. (NYSE: FE) announced today it has completed the previously
disclosed sale of an additional 30% ownership interest in its
FirstEnergy Transmission, LLC (FET) subsidiary to Brookfield
Super-Core Infrastructure Partners (Brookfield) for $3.5
billion.
FirstEnergy received $2.3 billion
of cash proceeds at closing, with the remaining $1.2 billion in interest-bearing notes due from
Brookfield, which are expected to
be paid off by the end of 2024. Proceeds from the transaction will
be used to further strengthen FirstEnergy's balance sheet and
support its five-year, $26 billion
Energize365 grid investment program.
This transaction follows Brookfield's purchase of a 19.9% ownership
interest in FET for $2.4 billion in
2022 and, with its closing, FirstEnergy will have completed
approximately $7 billion in strategic
equity financings at an equivalent share price of $87 per share, or 36x trailing 12-month
price-to-earnings valuation since late 2021.
"With the successful completion of this transaction, FirstEnergy
is entering a new era of financial strength and growth," said
Brian X. Tierney, FirstEnergy
President and Chief Executive Officer. "We are pleased to leverage
this strong foundation to make important investments to deliver
reliable and safe power to our customers and meet the energy
challenges of the future."
"We are pleased to build on our successful partnership
with FirstEnergy with a scaled follow-on investment in FET,"
said Natalie Hadad, Managing Partner
in Brookfield's Infrastructure
Group and Co-Head of Brookfield Super-Core Infrastructure Partners
(BSIP). "FET is a marquee, high-quality business with unique
long-term capital investment and value creation opportunities,
which is well aligned with our mutual objectives around the
decarbonization and electrification of the economy. This
transaction underscores BSIP's strategy of investing in essential
infrastructure assets that generate stable long-term cashflows
across market cycles."
FirstEnergy is dedicated to integrity, safety, reliability and
operational excellence. Its electric distribution companies form
one of the nation's largest investor-owned electric systems,
serving more than 6 million customers in Ohio, Pennsylvania, New
Jersey, West Virginia,
Maryland and New York. The company's transmission
subsidiaries operate approximately 24,000 miles of transmission
lines that connect the Midwest and Mid-Atlantic regions. Follow
FirstEnergy online at www.firstenergycorp.com and on X,
formerly known as Twitter, @FirstEnergyCorp.
Forward-Looking Statements: This news release includes
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 based on information
currently available to management. Such statements are subject to
certain risks and uncertainties and readers are cautioned not to
place undue reliance on these forward-looking statements. These
statements include declarations regarding management's intents,
beliefs and current expectations. These statements typically
contain, but are not limited to, the terms "anticipate,"
"potential," "expect," "forecast," "target," "will," "intend,"
"believe," "project," "estimate," "plan" and similar words.
Forward-looking statements involve estimates, assumptions, known
and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements, which may
include the following: the potential liabilities, increased costs
and unanticipated developments resulting from government
investigations and agreements, including those associated with
compliance with or failure to comply with the Deferred Prosecution
Agreement entered into July 21, 2021
with the U.S. Attorney's Office for the Southern District of
Ohio; the risks and uncertainties
associated with government investigations and audits regarding Ohio
House Bill 6, as passed by Ohio's
133rd General Assembly ("HB 6") and related matters, including
potential adverse impacts on federal or state regulatory matters,
including, but not limited to, matters relating to rates; the risks
and uncertainties associated with litigation, arbitration,
mediation, and similar proceedings, particularly regarding HB 6
related matters, including risks associated with obtaining
dismissal of the derivative shareholder lawsuits; changes in
national and regional economic conditions, including recession,
rising interest rates, inflationary pressure, supply chain
disruptions, higher energy costs, and workforce impacts, affecting
us and/or our customers and those vendors with which we do
business; weather conditions, such as temperature variations and
severe weather conditions, or other natural disasters affecting
future operating results and associated regulatory actions or
outcomes in response to such conditions; legislative and regulatory
developments, including, but not limited to, matters related to
rates, compliance and enforcement activity, cyber security, and
climate change; the risks associated with physical attacks, such as
acts of war, terrorism, sabotage or other acts of violence, and
cyber-attacks and other disruptions to our, or our vendors',
information technology system, which may compromise our operations,
and data security breaches of sensitive data, intellectual property
and proprietary or personally identifiable information; the ability
to meet our goals relating to employee, environmental, social and
corporate governance opportunities, improvements, and efficiencies,
including our greenhouse gas ("GHG") reduction goals; the ability
to accomplish or realize anticipated benefits through establishing
a culture of continuous improvement and our other strategic and
financial goals, including, but not limited to, overcoming current
uncertainties and challenges associated with the ongoing government
investigations, executing our Energize 365 transmission and
distribution investment plan, executing on our rate filing
strategy, controlling costs, improving our credit metrics, growing
earnings and strengthening our balance sheet; changing market
conditions affecting the measurement of certain liabilities and the
value of assets held in our pension trusts may negatively impact
our forecasted growth rate, results of operations, and may also
cause us to make contributions to our pension sooner or in amounts
that are larger than currently anticipated; mitigating exposure for
remedial activities associated with retired and formerly owned
electric generation assets; changes to environmental laws and
regulations, including but not limited to those related to climate
change; changes in customers' demand for power, including but not
limited to, economic conditions, the impact of climate change,
emerging technology, particularly with respect to electrification,
energy storage and distributed sources of generation; the
ability to access the public securities and other capital and
credit markets in accordance with our financial plans, the cost of
such capital and overall condition of the capital and credit
markets affecting us, including the increasing number of financial
institutions evaluating the impact of climate change on their
investment decisions; future actions taken by credit rating
agencies that could negatively affect either our access to or terms
of financing or our financial condition and liquidity; changes in
assumptions regarding factors such as economic conditions within
our territories, the reliability of our transmission and
distribution system, or the availability of capital or other
resources supporting identified transmission and distribution
investment opportunities; the potential of non-compliance with debt
covenants in our credit facilities; the ability to comply with
applicable reliability standards and energy efficiency and peak
demand reduction mandates; human capital management challenges,
including among other things, attracting and retaining
appropriately trained and qualified employees and labor disruptions
by our unionized workforce; changes to significant accounting
policies; any changes in tax laws or regulations, including, but
not limited to, the Inflation Reduction Act of 2022, or adverse tax
audit results or rulings; and the risks and other factors discussed
from time to time in our Securities and Exchange Commission ("SEC")
filings. Dividends declared from time to time on FirstEnergy
Corp.'s common stock during any period may in the aggregate vary
from prior periods due to circumstances considered by FirstEnergy
Corp.'s Board of Directors at the time of the actual declarations.
A security rating is not a recommendation to buy or hold securities
and is subject to revision or withdrawal at any time by the
assigning rating agency. Each rating should be evaluated
independently of any other rating. These forward-looking statements
are also qualified by, and should be read together with, the risk
factors included in FirstEnergy Corp.'s (a) Item 1A. Risk Factors,
(b) Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations, and (c) other factors
discussed herein and in FirstEnergy's other filings with the SEC.
The foregoing review of factors also should not be construed as
exhaustive. New factors emerge from time to time, and it is not
possible for management to predict all such factors, nor assess the
impact of any such factor on FirstEnergy Corp.'s business or the
extent to which any factor, or combination of factors, may cause
results to differ materially from those contained in any
forward-looking statements. FirstEnergy Corp. expressly disclaims
any obligation to update or revise, except as required by law, any
forward-looking statements contained herein or in the information
incorporated by reference as a result of new information, future
events or otherwise.
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SOURCE FirstEnergy Corp.