Mirant Provides Business Update and Operational Outlook* Continues to pursue successful financial restructuring * Reports $1.4 billion in total cash and available credit
PR NEWSWIRE - May 07, 2003 08:39
ATLANTA, May 7, 2003 /PRNewswire-FirstCall via COMTEX/ -- In remarks to be made during its analyst call this morning, Mirant (NYSE: MIR) provides an update on key elements of its financial restructuring and operational outlook.
"Over the past year-and-a-half, we've refocused our business on markets where we have critical mass of assets, people and customers," said Marce Fuller, president and chief executive officer, Mirant. "Now, we are implementing a plan to restructure Mirant's finances and enable the business to successfully compete in growing energy markets over the long term."
Update on Financial Restructuring
Mirant is currently in discussions with its agent banks and advisors for its bondholders to restructure approximately $5.3 billion of debt at Mirant and its subsidiaries. Mirant's proposal asks certain groups of its creditors to defer repayment of principal. To reassure these creditors who will be asked to extend maturities, the company is offering security in substantially all of its unencumbered assets, as well as more favorable terms. In addition, Mirant does not see the need to borrow any additional funds as part of its refinancing.
Mirant has established a refinancing plan with the following objectives:
* repay in full all obligations with interest;
* maintain sufficient liquidity and flexibility to execute its business
plan;
* minimize financial risk until an expected industry recovery; and,
* reduce the company's overall leverage over time
"I am optimistic about our refinancing efforts. We are committed to repaying, in full, all of our obligations with interest, and to producing value for all of our stakeholders," said Fuller.
Mirant noted that there are substantial risks if it is unable to successfully refinance its debt obligations. These risks are described in the company's 2002 Form 10-K.
Total Cash and Available Credit Update
* As of April 25, total cash and available lines of credit at Mirant and
its subsidiaries was $1.4 billion, compared with $2 billion in total
cash and available credit at year-end 2002.
[Note: For a reconciliation of total cash and available credit, and a summary of cash used since year-end 2002, please refer to the enclosed Table "A".]
* As of April 25, Mirant had $869 million in collateral posted to support
its North American assets, marketing and risk management business.
* The company expects to reduce collateral to approximately $500 million
by the end of the year.
-- The recent sale of the majority of Mirant's Canadian natural gas
aggregator, transport and storage business is expected to return
approximately $200 million in collateral to Mirant.
Operational Outlook for 2003 and Beyond
"We expect the value of Mirant to grow in the future. We have the right assets in the right markets, a product that is essential to a growing economy, the right focus and expertise and, most importantly, the right people," said Fuller.
Projected earnings before interest, tax, depreciation and amortization
(EBITDA)
* Mirant forecasts $800 million in adjusted EBITDA for 2003.
[Note: The company believes adjusted EBITDA provides a more meaningful measure of the company's underlying operating performance.]
* Mirant's North America operations are expected to contribute
approximately 40 percent of the company's 2003 adjusted EBITDA.
-- Of its North American gross margin, 92 percent is attributed to its
assets and asset-related risk management and marketing activities.
* Mirant's stable International operations are expected to contribute
approximately 60 percent of the company's 2003 adjusted EBITDA.
-- The Philippine and Caribbean assets are expected to grow, on
average, approximately five percent per year and provide stable
financial returns through the next five years due to the contract or
franchise nature of these businesses.
* The company expects approximately $100 million of improvements in
adjusted EBITDA from 2003 to 2004 due primarily to cost reduction
initiatives.
* Beyond 2004 the company forecasts improvements in EBITDA as markets
begin to recover.
[Note: For EBITDA and adjusted EBITDA reconciliation refer to the enclosed Table "B".]
Capital Expenditures
* Mirant expects capital expenditures for 2003 to be approximately $325
million; including construction, maintenance, and environmental
controls.
* Mirant expects capital expenditures for 2004 and 2005 to drop to $175
and $230 million respectively.
* Mirant's capital expenditures are projected to rise between 2006 to
2007 to just under $300 million each year due to forecasted
environmental expenditures planned at some of the company's power
plants.
Mirant is preparing revised quarterly financial information for 2002 and 2001. The company expects to provide the prior years' quarterly results, and file results for the first quarter 2003, as soon as possible.
Notice of Analyst Call
* Mirant executives will host an analyst call at 10 a.m. EDT, May 7 to
discuss the company's 2002 year-end financial results, operational
outlook and provide a general business update.
* Investors, media and the public are invited to listen to the call at
www.mirant.com. The audio may also be heard through a listen-only
telephone line: Domestic, 1-877-260-8899 and International, 612-332-
7516. A recording of the call will also be available until May 21, for
replay at www.mirant.com.
* To listen to the call, you will need:
-- RealPlayer, available at www.real.com or
-- Windows Real Media, available at www.windows.com.
Notice of Annual Meeting of Stockholders
* The 2003 Annual Meeting of Stockholders of Mirant Corp. will be held on
Thursday, May 22 at 9 a.m. at the Atlanta Marriott Alpharetta, 5750
Windward Parkway, Alpharetta, GA. Ms. Fuller will discuss earnings
results for 2002 and provide a general business outlook.
* The meeting will be webcast from a link at www.mirant.com .
Participants can also choose to dial 1-800-288-8968. Both methods are
listen-only. The meeting will be available for replay until June 5 at
www.mirant.com. |
