Edison Mission Energy, an unregulated power-generating unit of Rosemead-based Edison International, said Monday that it had filed for bankruptcy and had agreed on a reorganization plan with its parent company and holders of its $3.7 billion in debt.
“We are pleased to have reached this agreement, which we believe reflects the long-term value potential of our organization,” Pedro Pizarro, president of Edison Mission Energy, said in a statement. “This is an important first step in the process to reduce our debt, enhance our liquidity profile and position EME for continued operation and future success."
As part of the deal, Edison Mission Energy will be deconsolidated from Edison International “as of the filing date” and, in the future, will be referred to by the parent company as discontinued operations.
Edison International’s stake in the bankrupt generating unit will be transferred to unsecured creditors.
Santa Ana-based Edison Mission Energy said it had slightly more than $5.1 billion in assets and just under that amount in liabilities in Chapter 11 papers filed Monday in the U.S. Bankruptcy Court in the Northern District of Illinois.
Edison Mission Energy has been struggling on several fronts: depressed energy prices because of the nation’s boom in natural gas production; higher fuel costs affecting its older coal-fired facilities; and pending debt maturities.
The company also said, in the statement, that it faced the “need to retrofit its coal-fired facilities to comply with environmental regulations.”
Despite the challenges, Pizarro sought to strike a positive tone on Edison Mission Energy’s future.
“We believe this financial restructuring — coupled with the existing strength of our employees and assets — will position us to take advantage of new opportunities while preserving our focus on safe, reliable operations,” Pizarro said.
Edison Mission Energy companies own, operate and lease a portfolio of more than 40 electric generating sites around the U.S. that are powered by wind, natural gas, biomass and coal, as well as an energy marketing and trading operation based in Boston.