MDU Resources Group, Inc. announced today that its Brazilian partnership with EBX Capital Partners, MPX Holdings, has signed a term sheet with Brazilian state-controlled energy firm Petrobras, suspending arbitration proceedings and providing a framework in principle to sell its MPX Termoceará, Ltda. generating plant to Petrobras.
The term sheet provides for the sale to Petrobras of MPX Termoceará for US $137 million, (including $5 million currently in a court deposit) subject to possible adjustment based on Petrobras due diligence.
MPX and Petrobras have agreed to immediately suspend all arbitration and judicial proceedings between them relating to Termoceará pending completion of the sale.
“MPX Termoceará has been a solid investment overall for our corporation, our shareholders and all of our stakeholder interests. The sale of the facility will also benefit those groups,” said Martin A. White, chairman, president and chief executive officer of MDU Resources.
The sale is contingent on the parties entering into a definitive purchase agreement, the satisfactory completion of a due diligence review and audit of MPX Termoceará and certain other matters. It is anticipated that the sale would be completed by mid-year 2005.
“The parties have actively worked together to reach a mutually acceptable resolution of this issue,” said Paul Gatzemeier, president and chief executive officer of Centennial Energy Resources LLC, the independent power production unit of MDU Resources.
“While we have agreed to sell our interest in Termoceará, we are continuing to pursue other international opportunities.”
MPX Termoceará, of which MDU Resources owns 49 percent, is a 220-megawatt electric generating facility in northeastern Brazil. The facility was permitted, developed and constructed beginning in 2001.
MDU Resources Group, Inc., a member of the S&P MidCap 400 index, provides value-added natural resource products and related services that are essential to energy and transportation infrastructure.
MDU Resources includes natural gas and oil production, construction materials and mining, domestic and international independent power production, electric and natural gas utilities, natural gas pipelines and energy services, and utility services.