MVC Capital Discloses Price for Sale of Its Investment in Retail Supplier, In Officially Announcing Sale

MVC Capital, Inc. has officially announced an agreement to sell retail supplier U.S. Gas & Electric, Inc. to a new holding company, and has announced the sale price.

The sale of U.S. Gas & Electric, Inc. to a new holding company with new ownership had been exclusively reported by EnergyChoiceMatters.com in September (click here for more details).

As previously reported, MVC Capital, Inc. reached an agreement to sell U.S. Gas & Electric, Inc. to a new holding company, United States Gas & Electric Holdings, Inc. ("US Holdings"), which is primarily owned by Mr. Louis Beck, Mr. Lance T. Shaner and members of the management of USG&E.

MVC Capital said that the transaction, which is subject to regulatory approvals and various other closing conditions, including US Holdings successfully obtaining significant third-party financing, is expected to close by October 31, 2013.

Upon satisfaction of the closing conditions, including establishment of an escrow, MVC expects to receive gross proceeds of approximately $97.2 million for its equity investment, resulting in a realized gain of approximately $96.7 million based upon a $500,000 equity investment made in August 2007.

As of July 2013, U.S. Gas & Electric, Inc. had grown to more than 285,000 customers, and expected to reach nearly 330,000 customers by the end of 2013

As of July 31, 2013, MVC's equity investment in USG&E was valued at $92.7 million.

In addition to the equity proceeds and upon closing, USG&E will also retire an approximate $10.2 million second lien loan previously provided by MVC. Since October 2012, MVC has received distributions from USG&E of approximately $10 million.