The bankruptcy court for independent power producer Edison Mission Energy plans a July 17 hearing on a motion by the company to hire J.P. Morgan Securities LLC as Financial Co-Advisor along with current advisor Perella Weinberg Partners.
Edison Mission Energy, together with its bankrupt and non-bankrupt affiliates, is a leading independent power producing enterprise specializing in developing, operating, and selling energy and capacity from about 40 generating facilities in 12 states and the Republic of Turkey. The debtors have approximately 850 employees and maintain headquarters in Chicago, Ill., and Santa Ana, Calif.
Included in the bankruptcy are a handful of coal-fired plants in Illinois controlled by bankrupt affiliate Midwest Generation LLC. The chapter 11 cases were filed last December in the U.S. Bankruptcy Court for the Northern District of Illinois.
Since the commencement of these chapter 11 cases, the debtors and their advisors, in close consultation with their major creditor constituencies, have been focused on considering, analyzing, and potentially pursuing strategic alternatives that will maximize value for the benefit of all stakeholders, Edison Mission told the court. “Through these initiatives, the Debtors have recently determined that exploration of a potential sale or sales of certain or substantially all of their assets, businesses, and/or business units could maximize value in these chapter 11 cases. At the same time, and with the support of their existing advisors, including Perella, McKinsey & Company, and Kirkland & Ellis LLP, the Debtors are actively analyzing and preparing a proposed standalone restructuring (and related business plan) to be pursued either in its own right or in parallel with any potential sale process.”
Edison Mission added: “Importantly, the Debtors have not yet determined whether to actually commence a sale process. Instead, the Debtors are actively exploring the possibility and coordinating all efforts that would be necessary to implement such a transaction or transactions.”
Given the size and scope of the debtors’ businesses (and those of their non-debtor affiliates), the debtors have determined that the retention of J.P. Morgan to serve as co-advisor to Perella in connection with any potential sale process, would be beneficial to the restructuring efforts. J.P. Morgan’s significant energy-related experience, together with a potential dual-track sale and standalone restructuring process, warrants the retention of J.P. Morgan to work side-by-side with Perella to ensure that value and stakeholder recoveries are maximized, the company told the court.
J.P. Morgan has particular expertise concerning transactions involving energy and utility-related assets, including work with: Ameren Corp. (NYSE: AEE) in connection with the pending divestiture of the largely coal-fired Ameren Energy Resources Co. to an affiliate of Dynegy (NYSE: DYN); Alcoa in connection with its $600m sale in 2012 to Brookfield Renewable Energy Partners; and GenOn in connection with its 2012 merger with NRG Energy (NYSE: NRG).
J.P. Morgan has also advised on larger energy and utility-related transactions including serving as: lead financial advisor to Duke Energy (NYSE: DUK) on its 2012 merger with Progress Energy representing the largest U.S. power and utility merger; and as lead co-advisor to Exelon Corp. (NYSE: EXC) on its merger with Constellation Energy.