Joe - Strangely negative article in Atlanta Const. re MIR with no apparent substance. Wonder if price is being driven down prior to guidance this week. Your opinion?
Mirant's financial outlook expected to be dim
By MATTHEW C. QUINN
The Atlanta Journal-Constitution
Mirant Corp. will issue another financial report next week, with no sign that the Atlanta-based energy supplier can recover from a financial morass anytime soon.
Mirant has promised to report earnings for the fourth quarter and 2002 full year and provide an "operational outlook" for 2003 at the end of February.
No date or time has been set for the company's conference call with financial analysts to discuss the results, but the last day of the month is next Friday.
Analysts have low expectations. Many were disappointed with the company's last conference call, in mid-January, that offered little new information about the company's outlook. Mirant had released delayed second-quarter earnings the Friday before Christmas, 2 1/2 hours after the stock market closed -- not good timing for maximum attention.
There's "no flow of interest" among investors in Mirant stock, said Williams Capital analyst Christopher Ellinghaus. "Nobody's going to buy the stock until they [Mirant management] prove they're not going to go bankrupt."
Shares closed Thursday at $1.77, up 14 cents.
Mirant, spun off by Southern Co. in April 2001, is scrambling to recover from a crisis that swept across the entire independent energy sector following the collapse of Enron 14 months ago that has sent Mirant's stock price down more than 90 percent.
Mirant has reported losses for the last three consecutive quarters, terminated more than 500 employees, sold off $1.6 billion in assets and is reauditing 2000 and 2001 financial results.
Mirant Chief Executive Marce Fuller has expressed confidence the company will "thrive and survive."
But Mirant's landlord apparently is already scouting for tenants for Mirant's marquee headquarters building in Sandy Springs that includes a state-of-the-art energy trading floor.
Tom Bell, chief executive of Cousins Properties, confirmed the Atlanta-based developer tried to get Newell Rubbermaid to consider Mirant's 368,000-square-foot headquarters complex as its new home when the company moves from Illinois.
There's more than 12 years remaining on Mirant's lease.
Newell Rubbermaid, soon to be metro Atlanta's newest Fortune 500 company, is expected to go to north Fulton County instead.
Mirant spokesman David Payne said the company has "no current plans to vacate the entire" building but will consider subleasing portions of its space.
Mirant's most immediate concern is renegotiating a $1.125 billion loan with a group of lenders that includes Credit Suisse First Boston and Bank of America.
The money was originally drawn on a credit line that Mirant was unable to renew last year. The loan matures July 17. Another $521 million in debt matures later this year.
In its third-quarter report to the Securities and Exchange Commission, Mirant said it was trying to negotiate a new credit line for at least a portion of the amount due, but could "not provide assurance" that it would be successful.
William Holden, senior vice president, told analysts last month that talks would be renewed with lenders once the company completed a "detailed financial plan."
Analysts hope Mirant will at least provide an update on the negotiations -- "the only thing that matters," says Ellinghaus -- next week.
"They realize they'd better articulate some strategy to meet the financing obligations and how the company expects to come through," said Jeffrey Gildersleeve, an analyst with Argus Research.
-- Staff writer Tony Wilbert contributed to this article.
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