The bankruptcy court for power producer Entegra TC LLC and certain of its affiliates has scheduled a Dec. 17 hearing on a motion by the newly-reorganized companies to be allowed to exit Chapter 11 protection.
They on Nov. 26 requested entry of an order from the U.S. Bankruptcy Court for the District of Delaware granting a final decree closing their Chapter 11 cases. The reorganized debtors in these cases are Entegra TC LLC, EPG LLC, Union Power LLC, Union Power Partners LP, UPP Finance Co. LLC, Trans-Union Pipeline LLC, Trans-Union Interstate Pipeline LP, Entegra Power Services LLC, Union Power Employee Co. LLC and Gila River Energy HoldCo LLC. On Aug. 4, each company had filed voluntary Chapter 11 petitions as part of a pre-packaged financial workout. On Sept. 19, the court approved their reorganization plan in a confirmation order.
“As contemplated and required by the Plan and the Confirmation Order, all documents and agreements necessary to implement and complete the Plan were executed in accordance with the terms of the Plan and the Confirmation Order,” said the Nov. 26 motion. “All other motions, contested matters, and other proceedings that were before the Court with respect to the chapter 11 cases have been resolved.”
Said an initial bankruptcy filing about the companies: “The Debtors operate an independent power company that owns two of the largest gas-fueled power plants in the United States, located in El Dorado, Arkansas (the ‘Union Facility’) and Gila Bend, Arizona (the ‘Gila Facility’). The Debtors market electric power from the Union Facility and Gila Facility to wholesale customers in the southeastern and southwestern United States. The Entities that directly own and operate the Gila Facility are not anticipated to commence Chapter 11 Cases, and the Gila Facility will not become property of the Debtors’ chapter 11 estate.”
The debtors’ corporate headquarters and full service asset management group is based in Tampa, Florida. For the fiscal year ended Dec. 31, 2013, the debtors reported on a consolidated basis $220.6m in revenue. As of Dec. 31, 2013, the debtors reported on a consolidated balance-sheet basis total debt of approximately $1.5bn, which is what was slashed nearly in half in this bankruptcy process.
Michael Schuyler, the President and CEO of Entegra, said in initial testimony about the reasons to seek bankruptcy reorganization: “Wholesale electricity prices have fallen significantly in recent history as a result of reduced electricity demand and substantial reductions in natural gas prices. Lower natural gas prices have been caused, in part, by the rapid expansion of natural gas production, and natural gas inventories arising from the development of new extraction techniques and the discovery of new shale deposits. Generally, the presence of low-priced natural gas reduces the variable costs of natural-gas fired power facilities and reduces the wholesale market price for all generators. Furthermore, the power generation industry is highly competitive on both a regional and national level. This competitive environment has added an additional layer of complexity to the Debtors’ existing challenges.”