Entergy Corporation (NYSE:ETR) shares rose four percent today after the company announced that it would be spinning off its non-utility nuclear business from its regulated utility business through a tax-free spin off. Shareholders are hoping that the spin off will provide them with an opportunity to profit in an increasingly difficult marketplace.

The new spin off is expected to consist of the non-utility nuclear assets, including the Pilgrim Nuclear Station, the James A. FitzPatrick plant, Indian Point Energy Center, the Palisades plan, and the Vermont Yankee plant along with a power marketing operation. The new company would be 50 percent owned by Entergy and would generate about 5,000 megawatts in a market that has some of the highest energy prices in the USA.

Interestingly, the new spin off is expected to have $4.5 billion in debt, which Fitch considered too high to give it an investment grade level rating. This means that the new company could have trouble raising money through debt offerings and may have to resort to more-costly equity if it needs funding at any point. However, the parent company will definitely have a large burden off its shoulders, which has many shareholders excited.

The parent company also noted that shareholders should expect a share buyback plan as soon as the deal is completed. Combined, this news has many shareholders excited as shares continue to rally this afternoon. This makes ETR a stock worth watching!

Related Companies
Cleco Corporation (CNL)
Exelon Corporation (EXC)
NiSource Inc. (NI)