Cleco takeover bid focus of town halls in Many, Madisonville, New Iberia
The New Orleans-based consumer watchdog group Alliance for Affordable Energy will hold three town hall meetings Thursday to provide new financial information about the proposed private equity acquisition of Pineville-based Cleco Corp.
A judge ruled Wednesday that the proposed sale of Cleco is not in the public’s interest. An investor group has agreed to purchase Cleco for nearly $5 billion as part of a leveraged buyout.
Alliance for Affordable Energy CEO Casey DeMoss is working to stop the buyout. She says the utility will be saddled with more than one billion of new debt and that exposes customers to potential rate hikes and instability. Cleco denies that claim.
“It’s going to put tremendous risk onto the company that serves Central Louisiana customers. The risk is significant. It’s risk that the current Cleco company doesn’t have. This foreign equity firm, Macquarie, is buying Cleco with different kinds of debt,” DeMoss said.
Cleco agreed to a sale offer in 2014 from New York-based Macquarie Infrastructure and Real Assets, in combination with two other investment groups. The deal was approved by Cleco shareholders.
The Louisiana Public Service Commission could vote on the takeover bid on Feb. 24.
DeMoss says putting the utility in private hands strips it of all that it’s been built upon.
“It was started in Bunkie, Louisiana, as an ice making company and has had a tremendous relationship with the central Louisiana community. Many people in central Louisiana have worked for Cleco and owned stock in Cleco. It’s really seen as a community company,” DeMoss said, adding her advocacy organization has worked to shed light on the transaction for a year.
The town hall meetings will reveal new financial information recently made public by an administrative law judge.
The meetings are set for 5 p.m. in Many, Madisonville and New Iberia.
Analysts expect Cleco’s earnings report on Feb. 26.
Cleco provided a statement to The Daily Advertiser regarding the town hall meetings. It said, in part: “The Louisiana Public Service Commission has made sure that Cleco customers will not pay for any of the costs related to the transaction. Cleco customer rates will not increase as a result of the transaction.”
According to its website, Cleco serves approximately 286,000 customers in Louisiana with about 1,200 employees.