NRG Energy, Inc. (NYSE: NRG) announced Wednesday morning that it has received unanimous approval for its transformation plan from its board. The company said it expects to raise as much as $4 billion through asset sales and slash debt by $13 billion, sending its shares surging 21 percent to a near two-year high on Wednesday.
The company's shares were up 18 percent, hitting a high of $19.77 in early trading.
NRG Energy produces, sells and delivers energy in New York, Chicago, Houston, Washington, D.C., among other major markets. It has power plants with about 45,900 megawatts of generating capacity across 30 U.S. states and Canada.
The largest independent U.S. power producer plans to significantly slash costs, as part of an agreement with activist investors Elliott Management and Bluescape Energy Partners to cut costs and reduce debt. The three-year program intends to achieve "efficiencies primarily in corporate and lower head costs" CEO Mauricio Gutierrez said in a conference call on Wednesday.
In February NRG made a deal with Elliott and private equity firm Bluescape, agreeing to set up a five-member committee to look into cost-cutting, asset sales, capital allocation and broader strategic initiatives. Elliott and Bluescape together have an 8.2 percent stake in the company.
NRG said it would sell 50-100 percent of its interest in its unit NRG Yield Inc. (NYSE: NYLD) and renewables platform. NRG Yield had a market valuation of about $3 billion as of Tuesday close. The company's shares were up 3.6 percent at $17.34.