Mirant's bank debt traded up a couple of points after the company filed an amended plan of reorganization. Its '03 revolving credit was trading at 104, while its '05 revolver was trading in the 101-102 range. The bank debt traded up on a positive view of the company's performance after it emerges from bankruptcy. "People are looking at the proposed plan of reorganization and see value in it. They feel that over time the company will perform better," said one trader. "People are bullish on the company," said another.
Mirant has disclosed further details about its reorganization plan, including the appointment of a new board of directors. A spokesman said it wanted a fresh board that had no ties to Mirant before it filed for bankruptcy. The firm has hired a new chairman and ceo, Edward Muller, who replaces former Chairman Bill Dahlberg and former ceo Marce Fuller. Muller was previously president and CEO of Edison Mission Energy and former deputy chairman of Contact Energy. Mirant also confirmed it will be incorporated in the U.S. ending a rumor it would be an offshore company.
The U.S Bankruptcy Court in Fort Worth, Texas, also authorized a commitment from JP Morgan Chase, Deutsche Bank and Goldman Sachs to provide Mirant up to $2.35 billion in exit financing. This includes a $1 billion working capital facility and up to $1.35 billion in financing to pay creditors of Mirant Americas Generation (MAG), a subsidiary of the parent company.
Under Mirant's reorganization plan, MAG creditors will be paid in full with $1.35 billion in cash or new debt and 2% of the stock of the reorganized company. Also, $1.7 billion of long-term notes will be reinstated. The holders of $6.35 billion of unsecured claims against Mirant will receive 96.25% of the reorganized company's common stock. Mirant will contribute $415 million to the refinancing of MAG's notes dues 2011.