JUNO BEACH, Fla., Sept. 19, 2016 /PRNewswire/ -- NextEra Energy,
Inc. (NYSE: NEE) today announced that the United States Bankruptcy
Court for the District of Delaware
has approved Energy Future Holdings Corp. ("EFH") entering into the
previously announced definitive agreements with NextEra Energy
pursuant to which NextEra Energy will acquire 100 percent of the
equity of reorganized EFH, reorganized Energy Future Intermediate
Holding Company LLC ("EFIH"), Oncor Electric Delivery Holdings
Company LLC ("Oncor Holdings") and certain other subsidiaries,
including Oncor Holdings' approximately 80 percent ownership
interest in Oncor Electric Delivery Company ("Oncor"). The proposed
transaction was announced on July 29,
2016. The definitive agreements are part of EFH's overall
plan of reorganization that is designed to allow the company to
emerge from Chapter 11 bankruptcy.
In addition, NextEra Energy today announced that certain funds
advised by Fidelity Management and Research Company, which such
funds are creditors of EFH, have entered into the amended and
restated plan support agreement with EFH and NextEra Energy. The
plan support agreement is one of the definitive agreements included
in EFH's overall plan of reorganization.
NextEra Energy also said today that it expects to file soon with
Oncor a joint application with the Public Utility Commission of
Texas requesting approval of the
proposed transaction.
"We are pleased by today's bankruptcy court ruling and view it
as an important next step in the process to acquire Oncor," said
Jim Robo, chairman and chief
executive officer of NextEra Energy. "Our proposed transaction
provides Oncor with a financially strong, utility-focused owner
that shares Oncor's commitment to providing customers with
affordable, reliable electric delivery service and significant
value and certainty for the EFH bankruptcy estate. With this
important milestone behind us, we look forward to working closely
with additional EFH creditors to gain their support for successful
confirmation of EFH's plan of reorganization and, together with
Oncor, filing our joint application for transaction approval soon
with the Public Utility Commission of Texas."
Benefits to Oncor and its customers
Should the necessary approvals be obtained, Oncor will join a
family of companies that shares its commitment to making the smart,
long-term investments necessary to maintain and support affordable,
reliable electric service. In returning Oncor to a traditional
utility ownership structure, the proposed transaction is expected
to, among other things:
- Extinguish all EFH and EFIH debt that currently resides above
Oncor as part of the closing;
- Improve Oncor's financial strength and credit ratings resulting
in more favorable borrowing rates to fund necessary capital
investments – based solely on the news of the merger announcement,
Moody's Investors Service upgraded Oncor's senior secured credit
rating from Baa1 to A3 and placed the rating on review for further
upgrade. In addition, Standard & Poor's Financial Services
revised Oncor's outlook to positive from developing and Fitch
Ratings placed Oncor on Rating Watch Positive;
- Ensure the support of Oncor's existing five-year capital plan,
which includes substantial and necessary planned capital
improvement projects across the state;
- Enhance Oncor's ability to provide safe, reliable and
affordable electric delivery service to its customers well into the
future by partnering with a world-class energy company with a
long-term commitment to Texas;
- Retain local management, the Dallas headquarters and the Oncor name;
- Provide workforce stability and protections for Oncor
employees, including no material involuntary workforce reductions
at Oncor for at least two years after the transaction closes;
- Embrace a robust set of regulatory and governance commitments
regarding electric reliability, operations, employee protections,
accounting, code of conduct and Public Utility Commission of
Texas reporting; and
- Eliminate the financial risks to Oncor created by the 2007 EFH
acquisition and facilitate the resolution of the EFH
bankruptcy.
Benefits to creditors
The proposed transaction provides significant value and
certainty for the creditors of the EFH bankruptcy estate. With
creditor repayment composed primarily of cash, the transaction
would deliver a high degree of certainty of value to the EFH
bankruptcy estate.
Transaction details and approvals
Today, NextEra Energy signed a merger agreement amendment with
EFH that, among other things, increased the previously announced
purchase price by $300 million. As
part of the transaction, NextEra Energy intends to fund
$9.8 billion, primarily for the
repayment of EFIH debt for an implied total enterprise value of
$18.7 billion. Of that amount, it is
expected that certain creditors will be paid primarily in cash with
the remainder in NextEra Energy common stock. The number of shares
issuable to such creditors and EFH creditors will be determined
based on the estimated cash on hand at EFH at the closing of the
transaction, the volume weighted average price of NextEra Energy
common stock for a specified number of days leading up to the
closing and other factors specified in the definitive agreements.
NextEra Energy intends to use a combination of debt, convertible
equity units and proceeds from asset sales to fund cash being
provided to creditors.
The transaction is not subject to any financing contingencies.
NextEra Energy intends to repay in full the EFIH first lien
debtor-in-possession ("DIP") financing facility (currently
approximately $5.4 billion principal
amount) using cash financed by a non-EFH/Oncor NextEra Energy
affiliate upon closing. As part of EFH's plan of reorganization,
the transaction would extinguish all EFH and EFIH debt that
currently exists above Oncor.
Except as set forth in the merger agreement, EFH is now
prohibited from soliciting proposals from third parties. At any
time prior to confirmation of the EFH plan of reorganization, which
is currently anticipated to occur in December, should EFH terminate
the definitive agreement because it chooses to proceed with a
superior alternative transaction, EFH would be obligated to pay
NextEra Energy a $275 million
termination fee upon the closing of the alternative
transaction.
The transaction is subject to bankruptcy court confirmation of
EFH's plan of reorganization, approval by the Public Utility
Commission of Texas and the
Federal Energy Regulatory Commission, the expiration or termination
of the waiting period under the Hart-Scott-Rodino Act, and other
customary conditions and approvals.
NextEra Energy expects the transaction, which has been approved
by the boards of directors of both NextEra Energy and EFH, to be
completed in the first quarter of 2017.
NextEra Energy, Inc.
NextEra Energy, Inc. (NYSE: NEE) is a leading clean energy
company with consolidated revenues of approximately $17.5 billion and approximately 14,300 employees
in 27 states and Canada as of
year-end 2015, as well as approximately 45,000 megawatts of
generating capacity, which includes megawatts associated with
noncontrolling interests related to NextEra Energy Partners, LP
(NYSE: NEP) as of April 2016.
Headquartered in Juno Beach, Fla.,
NextEra Energy's principal subsidiaries are Florida Power & Light Company, which serves
more than 4.8 million customer accounts in Florida and is one of the largest
rate-regulated electric utilities in the
United States, and NextEra Energy Resources, LLC, which,
together with its affiliated entities, is the world's largest
generator of renewable energy from the wind and sun. Through its
subsidiaries, NextEra Energy generates clean, emissions-free
electricity from eight commercial nuclear power units in
Florida, New Hampshire, Iowa and Wisconsin. A Fortune 200 company and included
in the S&P 100 index, NextEra Energy has been recognized often
by third parties for its efforts in sustainability, corporate
responsibility, ethics and compliance, and diversity, and has been
ranked No. 1 in the electric and gas utilities industry in
Fortune's 2016 list of "World's Most Admired Companies." For more
information about NextEra Energy companies, visit these websites:
www.NextEraEnergy.com, www.FPL.com,
www.NextEraEnergyResources.com.
Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are typically identified by words or
phrases such as "may," "will," "anticipate," "estimate," "expect,"
"project," "intend," "plan," "believe," "predict," and "target" and
other words and terms of similar meaning. Forward-looking
statements involve estimates, expectations, projections, goals,
forecasts, assumptions, risks and uncertainties. NEE cautions
readers that any forward-looking statement is not a guarantee of
future performance and that actual results could differ materially
from those contained in any forward-looking statement. Such
forward-looking statements include, but are not limited to,
statements about the anticipated benefits of the proposed merger
involving NEE and EFH, including future financial or operating
results of NEE or Oncor, NEE's, EFH's or Oncor's plans, credit
ratings changes, objectives, expectations or intentions, the
expected timing of completion of the transaction, the value, as of
the completion of the merger or as of any other date in the future,
of any consideration to be received in the merger in the form of
stock or any other security, and other statements that are not
historical facts. Important factors that could cause actual results
to differ materially from those indicated by any such
forward-looking statements include risks and uncertainties relating
to: the risk that NEE, EFH or Oncor may be unable to obtain
bankruptcy court and governmental and regulatory approvals required
for the merger, or required bankruptcy court and governmental and
regulatory approvals may delay the merger or result in the
imposition of conditions that could cause the parties to abandon
the transaction; the risk that a condition to closing of the merger
may not be satisfied; the expected timing to consummate the
proposed merger; the risk that the businesses will not be
integrated successfully; disruption from the transaction making it
more difficult to maintain relationships with customers, employees
or suppliers; the diversion of management time and attention on
merger- related issues; general worldwide economic conditions and
related uncertainties; the effect and timing of changes in laws or
in governmental regulations (including environmental); fluctuations
in trading prices of securities of NEE and in the financial results
of NEE, EFH or Oncor or any of their subsidiaries; the timing and
extent of changes in interest rates, commodity prices and demand
and market prices for electricity; and other factors discussed or
referred to in the "Risk Factors" section of Oncor's or NEE's most
recent Annual Reports on Form 10-K filed with the Securities and
Exchange Commission. These risks, as well as other risks associated
with the merger, will be more fully discussed in subsequent filings
with the SEC in connection with the merger. Additional risks and
uncertainties are identified and discussed in NEE's and Oncor's
reports filed with the SEC and available at the SEC's website at
www.sec.gov. Each forward-looking statement speaks only as of the
date of the particular statement and NEE does not undertake any
obligation to update or revise its forward-looking statements,
whether as a result of new information, future events or
otherwise.
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SOURCE NextEra Energy, Inc.