Edison Mission Energy won court approval of a reorganization plan that will allow the electricity producer to leave bankruptcy free of debt through an asset sale to NRG Energy Inc. (NRG)
NRG will buy Edison Mission’s business for $2.64 billion under the plan approved today by U.S. Bankruptcy Judge Jacqueline Cox in Chicago. Edison Mission’s non-bankrupt parent, Edison International, agreed last month to an almost $1 billion settlement that resolved the unit’s tax, pension and other liabilities.
The purchase will give NRG coal-burning power plants in the Midwest that may boost revenue if natural gas prices rebound, Travis Miller, an analyst for Morningstar Inc., said last year. Edison Mission, based in Santa Ana, California, filed for bankruptcy in December 2012 citing a collapse in power prices and rising pollution control costs.
Edison Mission listed assets of $5.16 billion and liabilities totaling $5.09 billion. Debt included $3.7 billion on senior unsecured notes and $1.2 billion in debt on individual projects.
Among its assets were power plants in 12 states with a capacity of about 4,300 megawatts, enough to light about 3.4 million average homes, based on Energy Department data. It also owned about 1,700 megawatts of wind-driven generation and ran heat-and-power plants at refineries owned by Chevron Corp.
NRG, based in Princeton, New Jersey, is paying $2.29 billion in cash and $350 million in stock for the assets. Edison International (EIX), based in Rosemead, California, will continue to own what’s left of Edison Mission after the sale. The company also is the parent of non-bankrupt utility Southern California Edison.
Under last month’s settlement, Edison International will give the Edison Mission creditors’ trust cash and notes valued at about $625 million and assume about $350 million in liabilities.
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