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Entergy New Orleans granted OK to increase interim DIP to $200 million
By Caroline Salls
Pittsburgh, Oct. 27 - Entergy New Orleans, Inc. obtained approval to increase its interim debtor-in-possession financing availability to $200 million from $100 million, according to a Wednesday filing with the U.S. Bankruptcy Court for the Eastern District of Louisiana.
The $200 million represents the entire DIP commitment from parent Entergy Corp.
According to its motion, Entergy New Orleans expected to exceed or nearly exceed the $100 million interim borrowing limit by Oct. 26.
The company will use funds borrowed on the DIP to meet its near-term obligations, including employee wages and benefits, payments under power purchase and gas supply agreements and its current efforts to repair and restore the facilities needed to serve its electric and gas customers.
According to the motion, total restoration costs for the repair and/or replacement of Entergy New Orleans' electric and gas facilities damaged by Hurricane Katrina and business continuity costs are expected to range from $325 million to $475 million, not including potential incremental losses or ordinary course expenses such as payroll, maintenance and the purchase of electric power and gas.
The DIP maturity is Aug. 23, 2006.
Interest will be the cost of funds rate, which court documents said is currently about 460 basis points.
A final hearing on use of the facility was scheduled for Dec. 7.
Entergy New Orleans provides electric and natural gas service to customers in New Orleans and is the smallest of Entergy Corp.'s five utility companies. It filed for Chapter 11 on Sept. 23. Its case number is 05-17697.
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