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MCI Reaffirms Guidance, Clarifies SEC Filing
MCI on Tuesday reaffirmed its most recent financial forecasts and
clarified statements made in a filing with the Securities and Exchange
Commission, Reuters reported. The Ashburn, Va.-based company said it
stands by its July 7 financial forecasts, which called for 2003 revenues
of $24.5 billion. It said its revenues would be $24.6 billion in 2004
and $25 billion in 2005. The company also has warned that a recent ban
that prevents it from competing for new government contracts could
affect net income. Depending on the duration of the ban, its net income
may be cut by $36 million to $250 million over three years, reported the
newswire.
Conseco Amends Chapter 11 Bankruptcy Plan
Insurer Conseco Inc. on Tuesday said it has filed its fifth amended
reorganization plan with the U.S. Bankruptcy Court in Chicago, Reuters
reported. The Carmel, Ind.-based company said Judge Carol Doyle set a
Sept. 9 hearing date to consider confirmation of its chapter 11 plan.
The company has said it hopes to exit chapter 11 quickly, after its plan
is confirmed. Last week, Conseco said it resolved a dispute related to
the plan with former Chief Executive Gary Wendt, reported the
newswire.
Enron LJM2 Chapter 11 Reorganization Plan Approved
The chapter 11 reorganization plan for a controversial Enron Corp.
partnership called LJM2 Co-investment LP was approved in bankruptcy
court on Monday, the partnership advisors said, Reuters reported. The
partnership, which was formed in 1999 by Andrew Fastow and Michael
Kopper, a former Enron managing director, was one of several off-balance
sheet 'special purpose vehicles' at the center of the collapse of the
leading energy trader, according to the newswire. LJM2 sought bankruptcy
protection in September 2002. The reorganization plan provides for the
creation of two creditor trusts to pay claims against the LJM2 estate,
according to AlixPartners, which advised the partnership. 'We were able
to bring a resolution to this very complex case in less than a year,'
said Bettina Whyte, an AlixPartners principal and ABI president,
in a statement. 'I believe that the confirmed plan is fair and achieves
the best result for all parties.' The reorganization plan was approved
by Judge Steven Felsenthal of the Northern District of Texas Bankruptcy
Court on Aug. 19, reported the newswire.
PG&E Net Up, Merchant Unit Loss Narrows
Power company PG&E Corp. on Tuesday reported slightly higher
quarterly net earnings on narrower losses at its bankrupt merchant
energy business and lower interest and legal costs, Reuters reported.
Excluding one-time items, profit declined, but investors were cheered by
the San Francisco company's affirmation of its full-year earnings
forecast. PG&E reported second-quarter net income of $227 million,
up from $218 million a year earlier. Earnings per share fell to 56 cents
from 59 cents because of an increase in shares outstanding. Excluding
special items, PG&E Corp. and its bankrupt utility unit, Pacific Gas
& Electric Co., posted consolidated earnings from operations of 31
cents a share, down from 56 cents a year earlier. Special items included
a loss of 25 cents per share at PG&E's merchant unit, PG&E
National Energy Group, which filed for bankruptcy on July 8. The unit
lost 65 cents a share a year earlier, reported the newswire.
BMC Seeks Debt Relief, More Job Cuts
BMC Industries Inc., a maker of eyeglass lenses and television parts, on
Tuesday said it is cutting more jobs as it negotiates with lenders over
its debt agreements, but said it may be forced to seek bankruptcy
protection, Reuters reported. BMC said it was unlikely to be able to
negotiate additional waivers or other debt relief before the current
waiver on its credit agreement expires on Sept. 15. 'The failure to
maintain compliance with all covenants under the credit agreement would
result in a default, which would give lenders the ability to accelerate
all outstanding debt,' BMC said in a statement. 'In such event, BMC
would need to refinance or restructure the company's debt and, if
unsuccessful in these efforts, consider all other options, including
seeking protection under the bankruptcy law,' it said, reported Reuters.
The company said it has retained a financial adviser to assist in
developing a restructuring plan.
U-Haul's Parent Finds Equity Gains in Bankruptcy
Shares of Amerco, the company that controls U-Haul, have nearly tripled
since it sought chapter 11 protection in June, the New York Times
reported. The rise in the stock price coincides with a public relations
campaign by Edward J. Shoen, Amerco's chairman. Shoen has been meeting
with groups of potential stockholders to promote Amerco. His approach
has alarmed some holders of Amerco's nearly $600 million in bonds, who
think the company has too much debt and want stock to satisfy at least
part of their claims. 'We've been in the U-Haul business for 58 years
now, and we're pretty good at it. There is shareholder value here. I
believe it and others believe it, too,' said Shoen, reported the
Times.
OGE Energy To Acquire NRG Energy Power-plant Stake For $159.9
Million
OGE Energy Corp.'s Oklahoma Gas & Electric Co. agreed to buy a 77
percent stake in the McClain power plant near Newcastle, Okla., for
$159.9 million from NRG McClain LLC, an indirect subsidiary of NRG
Energy Inc. In addition, OGE Energy launched a public offering of 4.5
million common shares, excluding the underwriters' overallotment option
to buy up to an additional 675,000 shares. In a press release on
Tuesday, OGE said NRG McClain will sell its 400-megawatt interest in the
520-megawatt electric generating plant. The Oklahoma Municipal Power
Authority will continue to own the remaining 23 percent interest,
representing 120 megawatts of generating capacity.
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Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
FERC Orders NRG Energy To Continue Upholding CL&P Power
Contract
Federal energy regulators ordered NRG Energy Inc.'s power marketing unit
to continue upholding a money-losing power supply agreement with
Connecticut Light & Power Co. (CL&P), saying NRG didn't present
a convincing argument or why it should be allowed to reject the
contract. Xcel Energy Inc.'s NRG Power Marketing Inc. didn't meet the
so-called Mobile-Sierra standard, which required it to demonstrate that
it was in the public interest to exit the 3 1/2-year old agreement, the
Federal Energy Regulatory Commission wrote in its order, which was
issued on Friday. The contract calls for NRG to supply Northeast
Utilities's CL&P with 45 percent of the electricity for the utility
needs to serve its customers.
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Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
Britney Spears Faces Involuntary Bankruptcy
Three suppliers to Britney Spears's New York restaurant, Nyla, are
seeking to force the five-month-old eatery into bankruptcy, citing
unpaid bills in excess of $25,000, the Smoking Gun reported. The
involuntary bankruptcy petition was filed last month by firms that have
provided Spears's Pinky Enterprises with dairy products, lobster and
dinnerware. Spears and her business partners have yet to respond to the
chapter 7 petition filed on Oct. 18 in the U.S. Bankruptcy Court in
lower Manhattan.
EchoStar May Bid For Satellite Firm Loral
EchoStar Communications Corp. indicated it may make a $1.5 billion bid
for Loral Space & Communications Ltd., complicating Loral's plans to
emerge quickly from bankruptcy-court protection by selling core assets
to satellite operator Intelsat, an EchoStar rival, for $1 billion, the
Wall Street Journal reported. The move could be more of an effort
to impede the pending Loral-Intelsat deal than to launch a bidding war
for the entire company, according to industry officials, reported the
newspaper. But it also could complicate Loral Chairman Bernard
Schwartz's efforts to retain control of the company he has run for
decades, according to the online newspaper.
EchoStar's offer, contained in a letter sent over the weekend to
Schwartz and Loral's board, stops short of an official bid under
procedures established by the federal bankruptcy court in Manhattan.
EchoStar last week filed a motion with the court objecting to some
procedures and seeking to extend the bidding deadline. But the filing
didn't specify whether EchoStar planned to formally participate in an
auction, reported the Journal.
Liberty Media to Buy Control of UnitedGlobalCom
Liberty Media Corp. said on Tuesday it would acquire control of
UnitedGlobalCom by exchanging about $145 million of its shares for all
the Class B shares held by the founders of the global cable provider,
Reuters reported. The deal would give Liberty 96 percent voting power in
UnitedGlobalCom and about 75 percent of the company's shares, as it
seeks to control more of the businesses in which it invests. Liberty
already owns about 303 million UnitedGlobalCom shares, but has a
long-term deal to vote the same way as the UnitedGlobalCom founders. The
acquisition will terminate that agreement. UnitedGlobalCom's main
subsidiary, Amsterdam-based United Pan-Europe Communications, received
U.S. court approval for its chapter 11 bankruptcy reorganization plan
earlier this year, reported the newswire.
Mosaic Group Creditor Protection Extended to September
Mosaic Group Inc. said on Tuesday a Canadian court has extended its
court protection from creditors until Sept. 15, Reuters reported. The
Toronto-based marketing group filed for bankruptcy protection in
December after stalled sales and a heavy debt load caused it to default
on interest payments, reported the newswire.
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