JUNO BEACH, Fla., July 29, 2016 /PRNewswire/ -- NextEra
Energy, Inc. (NYSE: NEE) today announced a definitive agreement
under which a newly formed subsidiary of NextEra Energy will
acquire 100 percent of the equity of reorganized Energy Future
Holdings Corp. ("EFH") and certain of its direct and indirect
subsidiaries, including EFH's approximately 80 percent indirect
interest in Oncor Electric Delivery Company ("Oncor"), which
implies a total enterprise value of approximately $18.4 billion. The definitive agreement will be
filed publicly as part of the restructuring of EFH currently before
the United States Bankruptcy Court for the District of Delaware. The definitive agreement is part of
an overall plan of reorganization that is designed to allow EFH to
emerge from Chapter 11 bankruptcy. Bankruptcy court approval of EFH
entering into the definitive agreement is required for the
agreement to be binding upon EFH and Energy Future Intermediate
Holding Company LLC ("EFIH"). The parties will request that the
bankruptcy court approve EFH's entry into the agreement as soon as
practicable.
"We are pleased to have reached a definitive agreement to
acquire EFH's 80 percent indirect interest in Oncor," said
Jim Robo, chairman and chief
executive officer of NextEra Energy. "We are incredibly impressed
by Oncor's management team and its employees, and we are committed
to retaining the Oncor name, its Dallas headquarters and local management.
NextEra Energy shares Oncor's strategy of making smart, long-term
investments in transmission and distribution to continue to deliver
affordable, reliable electric service to its customers. We look
forward to working closely with Oncor's leadership team and filing
our joint application with the Public Utility Commission of
Texas.
"We are proud to own and operate one of the most efficient,
reliable and low-cost utilities in the nation, providing a value
proposition for our customers that includes electric bills that are
among the nation's lowest, high reliability and award-winning
customer service. We believe our deep operating expertise in
Texas and across the nation,
strong financial profile and experience operating in a regulated
utility environment offer uniquely compelling advantages."
A proven partner for Texas
Since 1999, NextEra Energy has had a significant and established
presence in Texas, including Lone
Star Transmission, LLC, a transmission service provider. NextEra
Energy is a substantial contributor to the Texas economy, having invested more than
$8 billion in transmission, power
generation, gas pipelines and other operations in Texas. The company provides hundreds of good,
well-paying jobs across the state and pays millions of dollars
annually in payroll, property taxes and lease payments to local
landowners.
Oncor: Locally led and locally managed
The transaction provides workforce stability and protections for
Oncor employees.
- NextEra Energy is committed to retaining local management, the
Dallas headquarters and the Oncor
name.
- NextEra Energy commits to no involuntary reductions to Oncor's
workforce as a result of the transaction for at least two years
after closing.
- NextEra Energy also commits that, for two years after closing,
current Oncor employees will be provided no less favorable salaries
or wage rates and substantially comparable incentive compensation
opportunities and employee benefits.
- NextEra Energy intends to honor all existing union contracts
and commitments.
- Upon completion of the transaction, together with Florida Power & Light Company (FPL) and
NextEra Energy Resources, LLC, Oncor will become a principal
business of NextEra Energy.
Benefits to Oncor and its customers
The transaction will improve Oncor's financial strength and
result in tangible benefits for its customers.
- Oncor will be part of a family of companies that shares Oncor's
commitment to making the smart, long-term investments necessary to
maintain and support affordable, reliable service.
- The transaction will extinguish all EFH and EFIH debt that
currently exists above Oncor.
- NextEra Energy has committed that it and its subsidiaries,
other than Oncor, will not incur, guarantee or pledge assets in
respect of any new debt that is solely or almost entirely dependent
on the revenues of Oncor without first seeking approval from the
Public Utility Commission of Texas.
- NextEra Energy's balance sheet and credit rating are among the
strongest in the industry. This financial strength should enable
Oncor to continue to invest in smart, innovative technologies and
execute on its five-year capital plan for the benefit of
customers.
- NextEra Energy expects that Oncor's credit rating will be
improved post-closing, generating savings for customers in terms of
lower borrowing costs.
- NextEra Energy, which has been recognized as the top electric
and gas utility in Fortune's "Most Admired Companies" ranking 9 out
of the last 10 years, will employ a traditional utility
organizational structure. The transaction is a straightforward,
traditional acquisition by a utility holding company.
- NextEra Energy's utility, FPL, provides its customers with
electric bills that are the lowest in Florida and 30 percent below the national
average, as well as award-winning customer service. FPL recently
received the top ranking for residential customer satisfaction
among large electric providers in the southern U.S., according to
the J.D. Power 2016 Electric Utility Residential Customer
Satisfaction StudySM. FPL also is the most operationally
efficient among all large utilities in America, the most reliable
among Florida utilities and among the most reliable in the nation.
This transaction will enable NextEra Energy and Oncor to share
expertise and best practices.
Benefits to NextEra Energy investors
The transaction provides clear benefits for NextEra Energy
investors.
- NextEra Energy expects the transaction to be meaningfully
accretive to earnings.
- NextEra Energy expects the accretion from this transaction to
enable it to grow at or near the top end of its previously
announced 6 percent to 8 percent per year adjusted earnings per
share growth rate through 2018, off a 2014 base.
- The transaction is consistent with NextEra Energy's focus on
investing in regulated and long-term contracted assets.
- The transaction leverages many of NextEra Energy's core
competencies, including investing smartly to improve operations,
creating long-term value for both customers and shareholders.
- NextEra Energy remains committed to maintaining its strong
balance sheet. It expects that its credit ratings and its
subsidiaries' credit ratings will be maintained post-closing.
Benefits to creditors
The transaction provides certainty of value for the creditors of
the EFH bankruptcy estate.
- NextEra Energy believes its deep operating experience, strong
financial profile, traditional utility ownership model and
meaningful Texas presence offer
uniquely compelling advantages.
- 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
As part of the transaction, NextEra Energy intends to fund
$9.5 billion, primarily for the
repayment of EFIH debt. 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 agreement. 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.
EFH is not prohibited from soliciting proposals from third
parties prior to bankruptcy court approval of EFH entering into the
definitive agreement with NextEra Energy. At any time after
bankruptcy court approval of EFH entering into the definitive
agreement and prior to confirmation of the EFH plan of
reorganization, if EFH terminates 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, the
expiration or termination of the waiting period under the
Hart-Scott-Rodino Act, the Federal Energy Regulatory Commission 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.
Advisors
Credit Suisse Securities (USA)
LLC and Bank of America Merrill Lynch are serving as lead financial
advisors to NextEra Energy. In addition, NextEra Energy's other
financial advisors include Deutsche Bank Securities, J.P. Morgan
Securities LLC, UBS Securities LLC and Wells Fargo Securities.
Chadbourne & Parke LLP is serving as lead legal counsel to
NextEra Energy.
Analyst and Investor Webcast and Conference Call
NextEra Energy will host a conference call and webcast to
discuss this announcement at 9 a.m.
ET (8 a.m. CT) today. The
listen-only webcast will be available on NextEra Energy's website
by accessing the following link:
www.NextEraEnergy.com/investors. The presentation for the
webcast may be downloaded
at www.NextEraEnergy.com/investors, beginning at
8 a.m. ET (7
a.m. CT) on the day of the webcast. A replay will be
available by accessing the same link as listed above.
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, 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; the risk that
the cost savings and any other synergies from the transaction may
not be fully realized or may take longer to realize than expected;
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.
NextEra Energy Contacts
Robert L. Gould
Vice President, Chief Communications Officer
Debra Larsson
Manager, Financial and Sustainability Communication
Media Line: 561-694-4442
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SOURCE NextEra Energy, Inc.