Mirant Achieves Settlement With Pepco
May 31 2006 - 8:30AM
PR Newswire (US)
ATLANTA, May 31 /PRNewswire-FirstCall/ -- Mirant (NYSE:MIR) today
announced that it has entered into a settlement with Potomac
Electric Power Company (Pepco) that will resolve outstanding
litigation between the companies that arose from agreements entered
into in 2000 as part of Mirant's acquisition of power plants and
other assets from Pepco. Mirant emerged from a Chapter 11
reorganization on January 3, 2006, but unresolved elements of its
case have remained pending before the bankruptcy court, including
the disputes with Pepco that are resolved by this settlement. The
settlement resolves a number of disputed matters, including a long-
term arrangement entered into in 2000 that required Mirant to buy
electric power from Pepco through 2021 at prices significantly
higher than market prices. Mirant will be allowed to reject this
arrangement and avoid future payments. Under the settlement, Pepco
will receive a claim under Mirant's previously approved Plan of
Reorganization that entitles it to receive a distribution of common
shares and cash with a value of $520 million, subject to certain
adjustments. To satisfy the claim, Mirant will distribute to Pepco
up to 18 million shares of Mirant common stock plus an additional
amount of cash so that Pepco receives a total of $520 million.
Mirant will not issue new shares to satisfy the Pepco claim but
will use shares from the shares to be distributed to creditors
under its Plan of Reorganization that were reserved for
distribution on disputed claims. "It is good to have this matter
behind us," said Edward R. Muller, chairman and CEO of Mirant. "We
look forward to resuming normal business relations with our valued
customer, Pepco." A summary of the material terms of the settlement
agreement together with the agreement will be filed on a Form 8-K
with the Securities and Exchange Commission. Mirant is a
competitive energy company that produces and sells electricity in
the United States, the Caribbean, and the Philippines. Mirant owns
or leases approximately 17,300 megawatts of electric generating
capacity globally. The company operates an asset management and
energy marketing organization from its headquarters in Atlanta. For
more information, please visit http://www.mirant.com/. Some of the
statements included herein involve forward-looking information.
Mirant cautions that these statements involve known and unknown
risks and that there can be no assurance that such results will
occur. There are various important factors that could cause actual
results to differ materially from those indicated in the
forward-looking statements, such as, but not limited to, the
decisions of the bankruptcy court regarding the settlement
agreement with Pepco and the disposition of any litigation or
claims arising out of such settlement agreement; changes in the
market value of Mirant's common stock; legislative and regulatory
initiatives regarding deregulation, regulation or restructuring of
the electric utility industry; changes in state, federal and other
regulations (including rate regulations); changes in, or changes in
the application of, environmental and other laws and regulations to
which Mirant and its subsidiaries and affiliates are or could
become subject; the failure of Mirant's assets to perform as
expected; Mirant's pursuit of potential business strategies,
including the disposition or utilization of assets; changes in
market conditions, including developments in energy and commodity
supply, demand, volume and pricing or the extent and timing of the
entry of additional competition in the markets of Mirant's
subsidiaries and affiliates; the resolution of claims and
obligations that were not resolved during the Chapter 11 process
that may have a material adverse effect on Mirant's results of
operations; environmental regulations that restrict Mirant's
ability to operate its business and other factors discussed in
Mirant's Form 10-K for the year ended December 31, 2005, and Form
10-Q for the quarter ended March 31, 2006. Stockholder inquiries:
678 579 7777 DATASOURCE: Mirant CONTACT: Media, Corry Leigh,
+1-678-579-3111, or , or Investor Relations, Mary Ann Arico,
+1-678-579-7553, or , or Sarah Stashak, +1-678-579-6940, or , or
Stockholder inquiries, +1-678-579-7777, all of Mirant Web site:
http://www.mirant.com/
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