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 will pay $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 in its Chapter 11 petition. Debt included $3.7 billion on senior unsecured notes and $1.2 billion in debt on individual projects.
Edison Mission owned or leased interests in more than 40 projects as of the end of 2012, including coal-fired plants in Illinois, gas-fired plants in California, wind projects in 11 states and a gas-fired plant in Turkey, according to the company’s website. They company had about 7,500 megawatts of capacity, enough to light about about 6 million average homes, based on Energy Department data.
NRG, based in Princeton, New Jersey, is paying $2.29 billion in cash and $350 million in stock for the assets. The sale should be completed in late March or early April, Edison International said today in a statement.
Edison International, 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 a trust for Edison Mission creditors cash and notes valued at about $625 million and assume about $350 million in liabilities.
The case is Edison Mission Energy, 12-bk-49219, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).