Edison International Unit Files for Bankruptcy Protection
By Dawn McCarty & Andrea Tan - Dec 17, 2012 9:06 AM ET
Edison Mission Energy, the unregulated generating unit of Edison International (EIX), filed for bankruptcy and said it reached agreement on a reorganization plan with holders of its $3.7 billion in debt and its parent.
Under the agreement, Edison International will transfer its stake in Edison Mission Energy to unsecured creditors, the unit said in a statement today. The Santa Ana, California-based company listed $5.13 billion in assets and $5.09 billion in liabilities in Chapter 11 papers filed today in U.S. Bankruptcy Court in Chicago.
Edison Mission Energy President Pedro Pizarro said the agreement is a first step in enhancing its liquidity. The company has been challenged by depressed energy and capacity prices and high fuel costs, according to the statement. Subsidiaries including Midwest Generation also filed for Chapter 11 bankruptcy protection.
The companies “have been hit by a sea change in the power market’s competitive landscape, dramatically higher environmental capital expenditure requirements, and debt payment maturities that have severely limited the debtors’ ability to compete effectively,” Maria Rigatti, Edison Mission’s chief financial officer, said in court papers.
Among Edison Mission Energy’s largest unsecured creditors listed in court papers are holders of $1.24 billion in 7 percent senior notes due in 2017; and $834 million in 7.2 percent senior notes due in 2019, under trustee Wells Fargo Bank NA.
Southern California Edison, another Edison International unit, is California’s second-largest utility, providing power to 14 million people, according to the company’s website. PG&E Corp. (PCG), based in San Francisco, owns California’s largest electric utility.
The case is In re Edison Mission Energy, 12-49219, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).
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