April 14, 2004
California Power Market
Vulnerable To Manipulation Report Says
California's electricity trading market remains
vulnerable to manipulative strategies linked to its 2000-01 energy
crisis, the state's attorney general said on Tuesday, Reuters reported.
Three years after supply shortages led to rolling blackouts and
bankruptcy of California's biggest utility, California agencies and the
Federal Energy Regulatory Commission (FERC) are still at odds over how
to close the door on the debacle.
FERC has approved refunds of about $3.3 billion for
overcharging by energy companies after finding widespread market
manipulation by bankrupt energy trader Enron Corp. and others. The state
claims it is still owed about $9 billion by suppliers. California
Attorney General Bill Lockyer said there is lingering potential for
energy companies to attempt the kinds of 'epidemic' market manipulation
that FERC found in its investigation. 'The incentives to game the market
and create disruption appear, for the most, to remain in place,'
according to a report issued by Lockyer, the newswire
reported.
With Bankruptcy Behind
It, PG&E Credit Ratings Rise
Customers of Northern California's largest utility
will spend an estimated $7 billion to $8 billion restoring PG&E to
health during the next nine years -- about $1,450 to $1,670 per
customer, the San Francisco
Chronicle reported. The San Francisco company cut electricity rates
as part of its deal with regulators to emerge from bankruptcy, but those
rates will remain well above where they were before the
crisis.
PG&E Chief Executive Officer Robert D. Glynn Jr.
expressed relief to see the bankruptcy's end. 'Regaining our
investment-grade credit ratings, paying creditors in full and doing so
without raising customer rates achieves our objectives and puts the
energy crisis behind us,' he said. The company did raise its average
electricity rate to 13.9 cents per kilowatt-hour after filing for
bankruptcy, then lowered it to 12.78 cents this spring. Prior to the
energy crisis, in April 2000, electricity cost customers 9.4 cents per
kilowatt-hour, the newswire reported.
Foot Locker To Buy About 350
Footaction Stores
Foot Locker Inc. on Tuesday said it agreed to buy
about 350 Footaction stores from bankrupt retailer Footstar Inc. for
$160 million, Reuters reported. Foot Locker said it expects the deal
will help boost its earnings within the first full year of operation.
The retailer, which operates 3,600 stores in the United States, Canada
and 14 other countries, said it expects to offer jobs to all Footaction
store associates. Foot Locker said the deal, which is subject to
approval by the bankruptcy court and anti-trust hearing, is expected to
close in its fiscal second quarter ending in July.
In March, Footstar said it
would sell its remaining athletic-shoe stores after failing to extend a
supply agreement with Nike Inc., its biggest supplier. Footstar, which
launched an investigation into accounting problems in 2002, had filed
for chapter 11 protection earlier in March. Its business has struggled
since Kmart closed some 600 stores as part of its own chapter 11
reorganization, the newswire reported.
Saskpool Hog Barns Seek Bankruptcy Protection
Three hog barns owned by a
Saskatchewan Wheat Pool subsidiary have applied for bankruptcy
protection after a major creditor called its loans, Saskpool, Canada's
No. 2 grain company, said on Tuesday, Reuters reported. The
company announced a month ago that it would sell off its hog interests
and Saskpool said suppliers to the barns had been shortening payment
terms since then. Saskpool said it issued demand letters to the hog
barns owned by its subsidiary, Heartland Pork Management Services, as
well as to several barns it owns with local investors. The
community-owned barns also plan to seek creditor protection, the
newswire reported.
New York State Fund Joins
Californians in Citigroup Dissent
Yesterday, a big Citigroup investor, the New York
State Common Retirement Fund, said it planned to withhold votes for
Sanford I. Weill and Charles O. Prince, saying in a statement that
'their status as company insiders raises questions about the
independence and objectivity of Citigroup's board of directors,' the
New York Times
reported.
On Monday, the California Public Employees' Retirement
System (Calpers), cited corporate governance problems at Citigroup as
reasons for not supporting the re-election of Weill and Prince as
directors next week. Weill and Prince have drawn scrutiny previously for
their stewardship of the bank, but Calpers' emergence as a corporate
critic may attract other dissidents as well, the Times
reported.
Delta Air Lines Posts a
Narrower Loss
Delta Air Lines on Wednesday posted a narrower
quarterly loss but said there are still challenging times ahead as it
strives to slash costs, Reuters reported. The Atlanta-based airline said
its loss for the first three months of the year was $383 million, or
$3.12 per share. A year earlier its loss was $466 million, or $3.81 a
share. Delta is the first major carrier to report quarterly results in
what is expected to be another stream of red ink for the industry as
high fuel prices magnify airline woes. Rising fuel prices have taken
a toll on the industry. With crude oil prices just off 13-year
highs, analysts have said the chances that the U.S. airline industry
will return to profitability this year are rapidly fading, the newswire
reported.
Amerco To Get $6.5 Million
From IRS
Amerco Inc., the parent of
truck renter U-Haul International Inc., on Wednesday said it has settled
a federal tax audit for the fiscal years ended March 31, 1996 and March
31, 1997, Reuters reported. The company, which emerged from bankruptcy a
month ago, said it is to receive a net refund of $6.5 million from the
Internal Revenue Service. The refund is related to deductions taken on
the company's 1996 and 1997 tax returns, it said.
Weirton Says Bankruptcy
Hearing Reset To April 20
Weirton Steel Corp. said a
bankruptcy court hearing set for today to consider the sale of the
company's assets has been rescheduled for April 20 at 9:00 a.m., Reuters
reported.The bankrupt steelmaker said in a statement that a judge
granted its request to delay the hearing to provide Weirton additional
time to review results of its asset auction that began Monday and ended
on Tuesday. The company's assets have attracted bids from International
Steel Group Inc. and from a group of debtholders.
Exide Tech. Faces
Objections To Revised Chapter 11 Plan
Exide Technologies, which saw a
previous version of its reorganization plan rejected by a bankruptcy
court, is facing some objections from creditors to its revised
turnaround plan. Creditors EnerSys Inc., Pacific Dunlop Holdings Inc.
and Atlantic Land and Improvement Co. submitted some of the seven
objections against confirmation of Exide's plan in filings made through
Monday with the U.S. Bankruptcy Court in Wilmington, Del. A hearing on
confirmation of the proposed plan, which would give 90 percent of
the new common stock in the reorganized company to secured creditors and
the other 10 percent to unsecured creditors, is scheduled for
Friday.
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Parmalat USA, Creditors
Object To Chapter 11 Examiner
Parmalat USA Corp. said a
pension fund seeking the appointment of an examiner to investigate the
company doesn't have a legal right to make such a request.The Southern
Alaska Carpenters Retirement Trust isn't a Parmalat USA creditor or
equity holder, but rather has a stake in the company's Italian parent,
Parmalat Finanziaria SpA, according to an objection filed by Parmalat
USA on April 8. That stake in Parmalat Finanziaria doesn't give the
pension fund standing under the Bankruptcy Code to seek an examiner or
trustee in Parmalat USA's chapter 11 proceedings, the company's court
papers said.
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Reserved