FirstEnergy sells stake in transmissions unit for $3.5 billion

Utility provider FirstEnergy Corp FE said on Thursday it would sell a 30% ownership interest in its unit FirstEnergy Transmission LLC (FET) to Brookfield Super-Core Infrastructure Partners in an all-cash deal of $3.5 billion.

The latest sale comes after FirstEnergy divested 19.9% of the unit to Brookfield in May.

The proceeds from the deal, expected to close by early 2024, will be used to improve FirstEnergy's credit profile as it targets a funds from operations-to-debt ratio of 14% to 15%.

Selling minority stakes is a compelling option for regulated energy companies to strengthen their financial position and meet capital needs that are likely to intensify on the road to fuel the U.S. transition to clean energy.

FirstEnergy also increased its 2021-2025 long-term growth plan to nearly $18 billion from the $17 billion target established in 2021, with a focus on smart grid and clean energy transition.

FET is the holding company of FirstEnergy's transmission utility units, which are regulated by the Federal Energy Regulatory Commission.