IPPs and Merchant Energy Co.s Message Board

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Strategies & Market Trends : IPPs and Merchant Energy Co.s

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To: NDBFREE who wrote (3020)	1/6/2004 11:41:23 PM
From: robbie	Read Replies (1) of 3358

Court approves El Paso/Mirant $87.5 mln settlement Wednesday December 24, 11:57 am ET HOUSTON, Dec 24 (Reuters) - A Texas bankruptcy court approved a settlement under which El Paso Corp. (NYSE:EP - News) will pay Mirant Corp. (Other OTC:MIRKQ.PK - News) $87.5 million to unwind energy trades between the two power companies, Mirant said on Wednesday. ADVERTISEMENT Mirant filed for Chapter 11 bankruptcy protection in July, which led to a default on a "master netting agreement" with El Paso Merchant Energy that combined the gains and losses from hundreds of trading positions between the two companies. Natural gas company El Paso originally calculated its net loss on the trading positions to be $37 million, while Mirant had said it was owed $107 million. Mirant and El Paso reached an agreement on the settlement earlier in December after both parties had made "significant movements and concessions," Mirant said in documents filed in the court of bankruptcy judge Michael Lynn, Mirant Americas Energy Marketing has already drawn about $36 million of the total from letter of credit facilities posted by El Paso Merchant Energy, Mirant spokesman Lloyd Avrams said. Mirant filed the largest U.S. bankruptcy of 2003 after failing to reach agreement with bond holders and banks to restructure heavy debt obligations. Mirant, one of the few remaining energy merchants to stick to the energy trading model since the collapse of Enron Corp. (Other OTC:ENRNQ.PK - News), listed total debt at $11.4 billion in July. Energy merchants market power and natural gas for both wholesale producers and consumers. Atlanta-based Mirant earlier this month said it had $1.734 billion in total cash and cash equivalents. The company is expected to announce a new business plan during the first quarter of 2004, but has no target date for a full restructuring plan.

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