Philadelphia Gas Works – the largest municipally owned gas utility in the US – could be privatised within the next two years.
The City of Philadelphia has hired two investment banks, Lazard and MR Beal, and five law firms – including the locally based Ballard Spah – along with other specialists to advise on the possible sale of an entity that generated US$805m of revenues in the 2011/12 financial year. The utility serves around 500,000 customers.
The City previously engaged Lazard in July 2010 to assess the potential for selling or leasing PGW, and the investment bank reported in February that it in its assessment a sale could raise between US$1.4bn and US$2.15bn, depending on buyer, the structure of the deal, and what liabilities were included – notably the healthcare costs of retired workers.
Philadelphia’s Mayor Michael Nutter says that the hiring of a team of “top flight” professionals to advise on the sale clearly demonstrated the City’s commitment to the process.