Esp.

Commerce Energy Sold Texas Retail Electric Business for $14.8 Million

COSTA MESA, Calif.--(BUSINESS WIRE)--October 27, 2008

Commerce Energy Group, Inc. (AMEX:EGR) said today that its principal operating subsidiary, Commerce Energy, Inc., sold all of its retail electric service contracts in Texas to Ambit Energy, LP (Ambit), for an estimated $14.8 million. The purchase price includes $8.5 million in cash received on closing, a second payment of $2.7 million, reduced by customer deposits and adjusted for final customer count, to be received on or before November 24, 2008 and deferred payments over a 24-month period estimated to be $3.6 million.

“This is a significant, positive step in both paying down debt as well as strengthening the core platform of the company,” said Commerce chief operating officer, Michael Fallquist. “We found a buyer in Ambit that shares our commitment to great technology, products and customer service. Ambit has agreed to preserve the terms and conditions of the customer contracts and this transaction will be seamless to all our customers.”

“In a market characterized by highly volatile energy rates, our customers can reduce or eliminate their payments month after month,” stated Ambit Energy Co-founder and Chief Marketing Officer Chris Chambless. “This free energy is unique in the retail energy market and positions Ambit Energy over our competitors as a true innovator.”

Commerce chief executive officer, Gregory L. Craig, remarked, “We have achieved another critical milestone in the now eight month old turnaround process. We are pleased to have completed a successful asset sale against the backdrop of a global credit and financial crisis and believe that this sale will better position Commerce operationally, financially, and strategically to achieve our future objectives.”

Commerce will retain its business providing retail electric power and natural gas in other markets in which it currently operates. In connection with the sale, Commerce also entered into amendments to its debt agreements, which, among other things, allow additional support of up to $6.0 million from AP Finance, LLC, remove the requirement to have a refinancing term sheet by October 30, 2008 and decrease the revolving loan limit and letter of credit limit under the credit facility.

Commerce was represented by Affiliated Energy Group (AEG) in connection with the transaction.

Download the press release: Commerce Energy Sold Texas Retail Electric Business for $14.8 Million