Date: Thu, 20 Nov 1997 19:15:20 GMT Server: NCSA/1.5.2 Last-modified: Mon, 24 Feb 1997 22:16:21 GMT Content-type: text/html Content-length: 6111
Contact for Cajun | Contact for the Trustees |
Clark T. Colvin 504-291-3060 |
Ron Rencher 801-320-6700 |
FOR IMMEDIATE RELEASE
April 8, 1996
Cajun Trustee Selects NRG/Zeigler for Further NegotiationsBaton Rouge, La., April 8, 1996 Ralph R. Mabey, the Chapter 11 Trustee in Cajun Electric Power Cooperative's reorganization case, announced today that, based on the joint bid of NRG Energy, Inc. and Zeigler Coal Holding Company, he is entering into substantive negotiations with the companies for the purpose of filing a plan of reorganization.The NRG/Zeigler bid, which will form the basis for further negotiations, proposes payment of cash in excess of $1 billion for Cajun's non-nuclear assets (exclusive of cash and working capital balances at Cajun) and would substantially reduce Cajun's wholesale rates to its members. Under the bid, it is anticipated that Cajun's members would receive power from the reorganized Cajun at an average rate of 43.2 miles. The rate charged to the members under the rate order issued by the Louisiana Public Service Commission in December 1994 is 48.8 mills. In addition to providing immediate rate relief, NRG/Zeigler would also freeze the rate charged to the members for five years, resulting over time in a further substantial decline in rates in current dollars as adjusted for inflation. The NRG/Zeigler bid also offers a special firm incentive rate for new high load industrial customers which is expected to be between 25 and 28 mills but in any event will be market competitive. This incentive rate would help assure the continued growth an competitiveness of Cajun's members. The proposal was one of twelve bids received by Mr. Mabey in accordance with the formal procedures approved by Judge Frank Polozola, the United States District Judge overseeing Cajun's Chapter 11 case. According to Mr. Mabey, "NRG/Zeigler submitted the strongest proposal which combines both substantial rate relief to Cajun's members and secure return to creditors." He added, "While no proposal can satisfy the fondest desires of both creditors and power users, NRG an Zeigler have stretched both sides of the equation in order to help provide a successful, and sustainable, solution to Cajun's reorganization." Subject to the present negotiations, the NRG/Zeigler offer will be incorporated into the plan of reorganization Mr. Mabey is to file by April 22, 1996. The offer anticipates that members will receive their electricity from the reorganized Cajun. In a related matter, Mr. Mabey reported that representatives of the Rural Utilities Service had agreed to a proposed disposition of Cajun's 30% interest in the River Ben nuclear generating facility which should result in a breakthrough in negotiations with Gulf States Utilities Co., a unit of Entergy Corp., over years-long litigation involving the parties. NRG Energy, Inc., a Minneapolis-based wholly-owned subsidiary of Northern States Power Co., is one of the leading participants in the independent power generation industry and has interests in power generation facilities with total design of 3,282 megawatts. The Zeigler family of companies is among the largest coal producers and marketers in the United States; they control 1.3 billion tons of economically-recoverable coal reserves. Since 1982, a Zeigler subsidiary has supplied over 90% of the coal provided to Cajun. Cajun filed its voluntary Chapter 11 petition in December 1994 following the Louisiana Public Service Commission's ruling which reduced Cajun's rates from 54.5 mills to 48.8 mills. Cajun provides wholesale electric generation and transmission services to twelve member distribution cooperatives under long-term all requirements contracts. The Rural Utilities Service, Cajun's largest creditor, has a claim against Cajun in excess of $4 billion. MR. Mabey began acting as Chapter 11 trustee in Cajun's case in late August 1995. For further information, call: For the Trustee: (Wasserstein, Perella & Co., Inc.) Ron Calise, (212) 969-2700 Keith Lord, (212) 969-7994 (801) 320-6700 (LeBoeuf, Lamb, Greene & MacRae) Ron Rencher, (801) 320-6700 For NRG Energy, Inc.: Michael A. O'Sullivan, (612) 373-5408 Craig A. Mataczynski, (612) 373-5460 For Zeigler Coal Holding Company: Vic Svec (618) 394-2430 |
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