Cleco Initiates Sales Process Amid Divestiture Plans

Categories: Louisiana Business NewsLouisiana ManufacturingLouisiana News

Cleco's electricity utility lines showcased in Pineville, Louisiana, as the company initiates a sale process.

News Summary

Cleco, the utility serving nearly 300,000 customers in Louisiana, has begun the sales process to find a buyer as its current owner, Macquarie Infrastructure, plans to divest its majority stake. The Louisiana Public Service Commission has been informed, and potential buyers may include Entergy and Bernhard Capital Partners. Concerns are raised about job security and rate stability for customers during this transition. The PSC’s approval will be necessary for any sale, which could take up to a year to finalize, raising questions about the future operation of Cleco.

Pineville, Louisiana – Cleco, an investor-owned utility that supplies electricity to nearly 300,000 customers across 24 parishes in Louisiana, has officially initiated a sales process in search of a buyer. This development comes as the current owner, Macquarie Infrastructure and Real Assets, plans to divest its majority stake in the company, a move anticipated since the acquisition in 2016. The Louisiana Public Service Commission (PSC) was informed of this change on Tuesday, January 21, 2025, marking the beginning of a potentially significant transition for both Cleco’s employees and the ratepayers who depend on its services.

The sales process may take several months, with a bidding timeline set to receive responses from interested buyers over the next six months. Potential buyers being speculated include Entergy, a major energy provider, and Baton Rouge-based Bernhard Capital Partners. While Entergy has declined to provide any comments regarding the sale, Bernhard Capital Partners has yet to respond to inquiries on the matter.

As the sales process unfolds, there are significant concerns regarding the future implications for employees and customers of Cleco. Louisiana legislators have urged the PSC to reject any sales deal that does not commit to maintaining current staffing levels at Cleco’s headquarters. The PSC has previously required commitments from Cleco during prior sales, indicating a history of ensuring job security and benefits for its employees. In earlier transactions, commitments included stipulations not to raise electricity rates until 2020 and providing one-time payments to customers.

Louisiana Public Service Commissioner Jean-Paul Coussan expressed the importance of achieving the best outcome for Cleco ratepayers and the state. The PSC will ultimately determine the fate of any proposed sale and its repercussions on employee job security and customer rates. The current ownership’s choice to engage investment firms Goldman Sachs and Moelis & Co. as advisors suggests a strategic approach to ensure a favorable sale process.

The timeline for concluding the sales process may extend up to a year after a preferred buyer is selected, as the PSC’s approval is necessary before finalizing any agreement. Nevertheless, during this transition period, Cleco’s existing rates are expected to remain stable due to established agreements that prohibit immediate increases. This assurance aims to provide comfort to both customers and stakeholders as the utility navigates the sales process.

The impending sale raises questions about how Cleco will operate under new ownership, especially concerning the utility’s role as a significant employer in the region. With several offices spread across Southeast Louisiana, any changes to Cleco’s leadership could have widespread effects on local employment and economy.

Despite the ongoing uncertainties, it is crucial to monitor this evolving situation closely. The stakes for Cleco’s customers, employees, and the surrounding community are high, as the utility plays a pivotal role in providing reliable electricity and supporting local jobs. The time for clarity on Cleco’s future is paramount, and the decisions made in the coming months will shape the landscape of utility services in Louisiana.

As Cleco moves forward with this sale process, the focus remains on protecting the interests of its ratepayers and workforce, ensuring that any transition does not come at the cost of job security or financial stability for those who rely on the services provided.