Dynegy Posts 3Q Loss on Sale of Plants

FILE - In this Aug. 4, 2007 file photo, Dynegy Corp.'s headquarters reflects other downtown Houston buildings. Dynegy said Thursday, Nov. 5, 2009, that it recorded a loss of $212 million, or 25 cents per share. (AP Photo/Pat Sullivan, file)

(AP)

Power company Dynegy Inc. said Thursday that it posted a second straight big quarterly loss as it continues to write down the value of plants that it is selling as part of a deal to bolster finances.

The Houston company also said it expects its net loss for the full year to be bigger than previously forecast, and hinted that the company may be interested in other transactions with power companies after the deal with former development partner LS Power Associates closes before year end.

Dynegy said it lost $212 million, or 25 cents per share, for the quarter ended Sept. 30. A year ago, Dynegy made $605 million, or 72 cents per share, driven by a $542 million after tax gain that reflected an updated estimate of what investments are worth based on current market values.

The company said in August that it plans to sell about a quarter of its generation — eight plants plus another under development — to LS Power for about $1 billion in cash and $500 million in stock.

Dynegy has said the sale will help the company reduce its near-term debt maturities and simplify the company's structure.

Holli Nichols, Dynegy's executive vice president and chief financial officer, said in an interview that the company might be interested in more transactions once the cash from the LS Power deal is put to work.

"We are firm believers that consolidation makes sense in this industry," she said. "Certainly we will be open to and explore any opportunity out there to create value for our shareholders."

During the quarter, Dynegy recorded a $234 million after-tax charge to write down the value of the eight plants. The company also recorded a $128 million loss on its forward contracts.

Dynegy reported adjusted earnings before interest, taxes, depreciation and income taxes, depreciation and amortization of $388 million, up from $269 million last year. Revenue fell by more than half, to $673 million, down from $1.76 billion last year.