Exelon subsidiary ExGen Texas Power files bankruptcy to complete sale

By Caroline Salls

Pittsburgh, Nov. 7 – Exelon Generation Power Co., LLC wholly owned subsidiary ExGen Texas Power, LLC filed Chapter 11 bankruptcy on Nov. 7 in the U.S. Bankruptcy Court for the District of Delaware.

According to an 8-K filed with the Securities and Exchange Commission, Exelon has been considering its strategic options regarding ExGen Texas.

On May 2, 2017, ExGen Texas entered into a consent, waiver and amendment agreement with the lenders of its $675 million non-recourse senior secured loan due Sept. 18, 2021. That agreement allowed the company to draw on its revolving credit facility and initiate a process to sell the assets of its wholly owned subsidiaries.

Exelon Corp. and Exelon Generation Co., LLC said in the 8-K that the bankruptcy filing was made in connection with the sales process.

Concurrent with the Chapter 11 filings, Exelon Generation entered into an asset purchase agreement to acquire one of ExGen Texas’ generating plants, the Handley Generating Station, for $60 million, subject to an adjustment for fuel oil and assumption of liabilities.

The completion of the acquisition is subject to court approval following a sale process, and the confirmation of a plan of reorganization in the bankruptcy cases.

The ExGen Texas debtors said they will continue to manage their assets and operate their businesses as debtors in possession under the jurisdiction of the bankruptcy court.

The company requested court approval to use the cash collateral of its pre-bankruptcy secured parties to fund its operations while in bankruptcy.

The cash collateral use is scheduled to terminate on May 15, 2018.

According to court documents, ExGen Texas has $100 million to $500 million in assets and $500 million to $1 billion in debt.

The company’s largest unsecured creditors are Mitsubishi Power Systems, Inc. of Orlando, Fla., with a $1.84 million trade debt claim; and Enterprise Texas Pipeline of Houston, with a $1.07 million trade debt claim.

As a result of the bankruptcy filing, Exelon and Exelon Generation determined that ExGen Texas’ assets and liabilities will be deconsolidated from Exelon’s and Exelon Generation’s consolidated financial statements as of Nov. 7.

The company is represented by Richards, Layton & Finger, PA.

ExGen is the owner of a portfolio of combined-cycle and natural gas-fired peaking and steam turbine generators in Texas. The company is owned by Exelon Generation Co. The Chapter 11 case number is 17-12377.

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