In part of the bid to support its capital growth program, FirstEnergy Corp. (NYSE: FE), on May 31st, 2022, announced the completion of the sale of 19.9% minority equity stake of its subsidiary, FirstEnergy Transmission, LLC (FET), to Brookfield Super-Core Infrastructure Partners for $2.375 billion. In the sale, FirstEnergy will retain an 80.1% equity interest in FET, and FirstEnergy’s workforce will be the human resources in charge of maintaining and operating the company’s transmission system.
It should be recalled that FirstEnergy initially announced the agreement with Brookfield in November 2021. In the announcement, FirstEnergy also revealed a $1 billion equity investment in FirstEnergy common stock by Blackstone Infrastructure Partners, which closed in December. The proceeds from these strategic sales and financing, totaling about $3.4 billion, will strengthen the company’s balance sheet, fund its capital program, and address its equity plans. The proceeds will not be used for annual issuances as up to $100 million has been reserved for that under regular stock investments and employee benefit plans.
FirstEnergy proposed a sustainable capital investment program of $17 billion from 2021 through 2025, which is focused on developing a more resilient modern grid with priority on emerging technologies such as electric vehicles infrastructure, renewable generation, and programs to help customers optimize their energy use.
FirstEnergy President, who is also the Chief Executive Officer, Steven E. Strah, said, “With the completion of these transformative investments, FirstEnergy is well-positioned to continue delivering operational and financial excellence, drive our long-term strategies to support smart grid and clean energy initiatives, and transform our company into a more innovative, resilient and industry-leading organization.”
Eduardo Salgado, the Managing Partner in Brookfield’s Infrastructure Group and Head of Brookfield’s Super-Core Infrastructure Partners, also said, “We are pleased to have completed this transaction and see this marquee, high-quality investment in our portfolio. Our partnership with FirstEnergy will position us well to capture unique capital investment and value creation opportunities over the long-term in-line with our mutual objectives around the decarbonization and electrification of the economy.”
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