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Mirant exits bankruptcy, secures $2.35 bln



Tuesday January 3, 5:37 PM EST


By Matt Daily

HOUSTON (Reuters) - Electricity producer Mirant Corp. (MIRKQ) said on Tuesday that it had emerged from bankruptcy protection after two-and-a-half years and secured $2.35 billion in financing.

The Atlanta-based company, which converted more than $6 billion of debt and liabilities into equity under its reorganization, had filed for Chapter 11 bankruptcy protection in July 2003 after failing to reach a deal with creditors to restructure its debts.

Last month, power producer Calpine Corp. (CPNL), filed for Chapter 11 bankruptcy protection, listing debts of $22.5 billion against $26.6 billion in assets.

Mirant, which owns or controls about 14,000 megawatts of power generating capacity in the United States, said it had applied to be re-listed on the New York Stock Exchange under the ticker symbol MIR.



Mirant and many of its peers in the wholesale power sector were hit hard by the collapse of the merchant electricity trade in 2000-2001, when the industry was rocked by the California power crisis, the collapse of Enron Corp., and weak power margins.

Mirant, like companies such as Williams Cos Inc (WMB), El Paso Corp. (EP), Duke Energy Co. (DUK), Dynegy Inc. (DYN), invested billions of dollars in new power plants to expand in the newly deregulated electricity markets.

But that expansion created a glut of power supplies, pressuring prices even as natural gas costs rose, forcing many companies to push back debt maturities and sell off assets at a fraction of their costs.

That market downturn came as the power merchants were under increasing scrutiny in the aftermath of the California energy crisis, where they were accused of squeezing the West Coast market, holding back supplies and driving prices sharply higher.

Mirant settled claims it manipulated prices during the crisis for about $500 million.

In December, Mirant said its loss before items for the first nine months of 2005 widened to $225 million from $127 million for the same period last year on operating revenues of $1.838 billion for the period versus $2.82 billion the previous year.

In September, the U.S. Bankruptcy Court in Fort Worth, Texas, approved the appointment of Edward Muller as chairman, president and chief executive officer, succeeding former chairman William Dahlberg and former CEO Marce Fuller.

(Additional reporting by Dan Wilchins in New York)


©2005 Reuters Limited.
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