Covanta to Sell Stake in Philippines Power Plant for $215 Million

Date: December 13, 2010

Source: Covanta Holding Corporation

Covanta Holding Corp. has agreed to sell its stake in an electric generation facility in the Philippines to Electricity Generating PLC for about $215 million in cash. Under the deal that is expected to close in the first quarter of next year, Covanta is selling its interest in Covanta Philippines Operating, Inc., which operates the facility, and its 27% ownership interest in the project company, Quezon Power, Inc. In June the company said it would sell its equity interests in four fossil fuel facilities in the Philippines, India and Bangladesh. The Quezon transaction is the first in that initiative and represents a major component of those assets.


Covanta Enters Agreement to Sell its Interest in Quezon Project

Covanta Holding Corporation (NYSE:CVA) (the "Company" or "Covanta"), today announced that it has agreed to sell all of its interests in the Quezon coal-fired electric generation facility located in the Philippines to Electricity Generating PCL ("EGCO") for a price of approximately $215 million in cash. EGCO is a current partner in the Quezon project and we expect the transaction to close in the first quarter of 2011, subject to customary approvals and closing conditions.

In June of this year, Covanta announced plans to sell its equity interests in four fossil fuel facilities in the Philippines, India and Bangladesh. Quezon is the first sale from that effort and represents a significant majority of the value of these non-core assets. Commenting on the transaction, Anthony Orlando, Covanta's President and CEO stated that, "We are pleased to be selling our interest in Quezon to our partner in the venture, EGCO. Quezon is a world-class asset and the valuation reflects its strong potential going forward."

The Quezon assets being sold consist of the Company's entire interest in Covanta Philippines Operating, Inc., which provides operation and maintenance services to the facility, as well as its approximately 27% ownership interest in the project company, Quezon Power, Inc. ("QPI"). The sale is expected to generate a one-time after tax book gain of approximately $140 million at closing. For the twelve months ended September 30, 2010, Quezon's contribution to Covanta's consolidated results was: $2.8 million of revenue, $19.5 million of Adjusted EBITDA, $15.9 million in Free Cash Flow and $0.12 of diluted earnings per share¹.

Speaking about intended uses of the proceeds, Sanjiv Khattri, Covanta's EVP and CFO stated that, "Consistent with our June announcement regarding capital allocation and return of capital to shareholders, we anticipate using all of the sale proceeds that can be repatriated tax efficiently to return capital to our shareholders; we estimate this amount to be in excess of $100 million."

Discussions with prospective buyers for the three remaining assets in India and Bangladesh continue. The Company is committed to achieving a fair valuation and plans to retain any or all of them if fair value cannot be achieved in a timely manner.

Citi has been retained to assist in the sale of the non-core assets.

About Covanta

Covanta Holding Corporation (NYSE:CVA) is an internationally recognized owner and operator of large-scale Energy-from-Waste and renewable energy projects and a recipient of the Energy Innovator Award from the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy. Covanta's 44 Energy-from-Waste facilities provide communities with an environmentally sound solution to their solid waste disposal needs by using that municipal solid waste to generate clean, renewable energy. Annually, Covanta's modern Energy-from-Waste facilities safely and securely convert approximately 20 million tons of waste into more than 9 million megawatt hours of clean renewable electricity and create 10 billion pounds of steam that are sold to a variety of industries. For more information, visit

About EGCO

Electricity Generating PCL ("EGCO") was the first independent power producer in Thailand. EGCO is currently considered to be one of the premier independent power companies in Southeast Asia with a range of power generation facilities under management and extensive operation, maintenance and related power plant services capabilities. The Company's portfolio is comprised of power generation assets with gross capacity of 7,300 MW. These facilities are situated in Thailand, the Philippines, and Laos PDR. EGCO's fleet has a fuel mix comprised of natural gas, coal, hydropower, biomass and solar. For more information on the group, please visit

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Covanta and its subsidiaries, or general industry or broader economic performance in global markets in which Covanta operates or competes, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words "plan," "believe," "expect," "anticipate," "intend," "estimate," "project," "may," "will," "would," "could," "should," "seeks," or "scheduled to," or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. Covanta cautions investors that any forward-looking statements made by Covanta are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to Covanta, include, but are not limited to, the risk that Covanta may not successfully close its announced or planned acquisitions or projects in development and those factors, risks and uncertainties that are described in securities filings by Covanta with the SEC. Although Covanta believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any forward-looking statements. Covanta's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this press release are made only as of the date hereof and Covanta does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.

Marisa F. Jacobs
Vice President, Investor Relations

James Regan
Associate, Media Relations and Corporate Communications

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