Posted on 09/08/2005 8:01:37 PM PDT by MeneMeneTekelUpharsin
Term sheet paves way for company's emergence from bankruptcy
ATLANTA, Sept. 7 /PRNewswire-FirstCall/ -- Mirant Corporation (Pink Sheets: MIRKQ - News) announced today that it has reached an agreement with a number of the key constituencies in its Chapter 11 case regarding the terms upon which it will emerge from bankruptcy protection.The deal sets forth the modifications that Mirant will make to its currently pending Plan of Reorganization (POR) filed in March of this year, and the terms on which the constituencies will support and recommend the amended POR's confirmation. Parties to the accord include the company, all three of the statutory committees appointed to represent creditors and stockholders in the Chapter 11 case (the Mirant Creditors' Committee, the Mirant Americas Generation, LLC (MAG) Creditors' Committee and the Mirant Equityholders' Committee), and Phoenix Partners, acting as an ad hoc representative of the holders of the Mirant Trust I subordinated trust preferred securities. An ad hoc committee comprised of Mirant bondholders also announced their support for the arrangement.
"This agreement marks a major step forward in the company's reorganization effort and is the product of a recent round of intense negotiations between the company and its statutory committees," said M. Michele Burns, Mirant's chief restructuring officer and chief financial officer. "The deal now permits Mirant's constituencies to put their differences behind them and work together to bring the business out of Chapter 11 quickly and on terms that will clearly maximize the recovery of all stakeholders." "Although much remains to be done and there are a number of important matters that still need to be addressed, such as outstanding litigation, we are pleased that the momentum around the company's exit from Chapter 11 is finally starting to build," said Burns.
Importantly, the Mirant Plan Term Sheet sets forth the financial terms on which the value of the Mirant enterprise will be shared among the company's stakeholders. The Term Sheet affirms that all MAG debt obligations will be satisfied in full and that MAG's $1.7 billion of long-term debt will be reinstated. The accord clarifies the company's current intention to satisfy MAG's approximately $1.5 billion of short-term debt and other obligations with common stock in the reorganized parent company for 10 percent of the amount owed with the balance to be paid in cash. Although the company plans to raise the cash through a proposed $1.35 billion capital markets financing at its exit from Chapter 11, it still reserves the right to issue new notes directly to the creditors for this portion of their claims. The Term Sheet also specifies the methodology for calculating the amount of interest that accrued on all MAG debt during the pendency of the Chapter 11 case and provides details regarding various credit support mechanisms to be provided under the POR by the reorganized parent company for the benefit of MAG.
Under the POR, as it is to be amended, approximately $6.5 billion of unsecured debt and obligations at the parent level will be exchanged for 96.25 percent of the remaining common stock (exclusive of the above-noted MAG shares and shares reserved for employee programs under the POR). This includes an agreed-upon participation by Mirant's subordinated trust preferred securities, which will receive 3.5 percent of the common stock (excluding the MAG and employee shares) and warrants entitling the holders to purchase 5 percent of the new common stock issued under the POR, exclusive of employee shares. The remaining common stock (3.75 percent excluding the MAG and employee shares) will go to the company's current shareholders. The shareholders will also receive warrants to purchase an additional 10 percent of the common stock of the company.
The Term Sheet also specifies that recoveries on the company's avoidance actions (including the action against Mirant's former parent, Southern Company) will trigger payments to be shared by Mirant's former creditors and shareholders on a 50/50 basis. As part of the terms of the agreement, and upon the approval by the Bankruptcy Court of the Amended Disclosure Statement, Mr. Edward Muller, the former CEO of Southern California Edison's merchant energy subsidiary, Edison Mission, will be elected to the board of directors of Mirant and named chairman. Mirant will also request that the Court approve an employment agreement with Mr. Muller as chief executive officer. He will replace Mr. A.W. ("Bill") Dahlberg, who has served as chairman of Mirant's board of directors since 2000, and Ms. Marce Fuller, who has served as Mirant's president and chief executive officer since 1999.
The agreement also provides that a new board of directors will be formed consisting of Mr. Muller, Mr. A.D. ("Pete") Correll (a current board member), six independent members selected jointly by the company and the Mirant Creditors' Committee, and one independent member to be chosen through a joint selection process with the Mirant Equity Committee. As a result of the agreement, Mirant and the committees asked United States Bankruptcy Judge D. Michael Lynn, who has presided over the case since its filing in July, 2003, to stop work related to the ongoing valuation dispute in the case and schedule a hearing to approve the company's soon-to-be amended disclosure statement for September 28, 2005.
"In granting the parties' request, the Judge praised the parties for their efforts in developing the terms of a consensual plan and indicated his willingness to drive a schedule that would make it possible for the company to exit Chapter 11 by year-end," said Thomas E. Lauria of White & Case, LLP, Mirant's lead counsel in its bankruptcy case. Mirant will file the Mirant Plan Term Sheet on Form 8-K with the Securities and Exchange Commission. The term sheet contains the specific details of the agreement and will be available at http://www.mirant.com. Mirant is a competitive energy company that produces and sells electricity in the United States, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. The company operates an asset management and energy marketing organization from its headquarters in Atlanta. For more information, please visit http://www.mirant.com.
You're one of the most despised individuals I have every made contact with on this forum. If you never come back and respond it won't hurt my feelings one bit. You were wrong and you need to apologize. That failing, go away and do me a favor. Never come back.
It is over. To those who were at least courteous about the whole affair, thank you. To the others...words fail me.
Damn. I was gonna use my 500 shares to wallpaper my rec room, too.
Ha ha ha. Too bad. At least you have a sense of humor. I distinctly remember some unkind comments made in the past. FR has a long memory (archives).
Well, it's still cheaper than wallpaper, but I'll hold off for a while.
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