HAGERSTOWN, Md. (AP) -- Allegheny Energy Inc. is considering selling property at its corporate headquarters in Hagerstown to bolster its finances, the embattled company has told employees in a memorandum.
The utility company would lease back the property for its continued use, according to the memo obtained by The (Hagerstown) Herald-Mail.
Allegheny Energy spokesman Guy Fletcher declined to comment Monday on the report.
Several current and former employees have confirmed the validity of the e-mailed memo, the newspaper reported.
The memo said real estate consultants would be touring property at the Hagerstown corporate headquarters that might be put up for sale. It did not specify the assets that might be sold.
"While no decisions have been made on the sale of this property, this is another option that we must consider in order to improve our financial performance. If a decision is made to sell the property, our plan at this time would be to lease back this facility for our continued future use, as we have done in the past with other properties," the memo read, in part.
Allegheny Energy said previously it would try to sell assets to reverse a financial decline that threatens to force it into bankruptcy. Since December, the company has struck deals to sell two tracts of West Virginia forest land for a total of $16.7 million.
Allegheny Energy also is seeking buyers for some of its electricity generating stations, an analyst said Monday.
"I know they're trying to sell some generation, but apparently the prices weren't coming in at prices they thought were acceptable, from what I understand," said Paul T. Ridzon of McDonald Investments in Cleveland.
Allegheny Energy moved its headquarters in 1996 from New York to a building near the junction of Interstate 70 and Maryland 632 that previously housed its Potomac Edison Co. subsidiary.
The company turned about 400 of the site's 500 acres into a business park, Friendship Technology Park, which landed its first occupant, an Intelsat satellite communications facility, this year.
Allegheny Energy is struggling to overcome a drop in energy trading activity following Enron Corp.'s collapse. It also is losing money on a huge energy-supply contract with California.
In another development, The Herald-Mail reported Sunday that Allegheny Energy is locked in a court battle with Lloyd's of London over the insurer's refusal to pay Allegheny Energy $355.9 million to settle more than 18,000 asbestos-related claims originating in West Virginia.
Fletcher declined to comment on the company's lawsuit, filed in May in Monongalia County, W.Va., or Lloyd's of London's lawsuit, filed around the same time in Washington County, Md.
Allegheny Energy has about 1.6 million electricity customers and 230,000 natural gas customers in Maryland, Ohio, Pennsylvania, Virginia and West Virginia.
