Mirant disclosure statement approved; plan confirmation hearing set for Dec. 1

By Caroline Salls

Pittsburgh, Oct. 3 - Mirant Corp.'s disclosure statement for its second amended plan of reorganization that reflects its agreement with a number of the key constituencies in its Chapter 11 case was approved Monday by the U.S. Bankruptcy Court for the Northern District of Texas.

A hearing on plan confirmation is scheduled for Dec. 1.

The plan includes an exchange of $6.36 billion of unsecured debt for 96.25% of new common stock in the reorganized company.

Parties to the agreement include the company, all three of the statutory committees appointed to represent creditors and stockholders (the Mirant creditors' committee, the Mirant Americas Generation, LLC creditors' committee and the Mirant equityholders committee), and Phoenix Partners, acting as an ad hoc representative of the holders of the Mirant Trust I subordinated trust preferred securities.

An ad hoc committee comprised of Mirant bondholders also announced its support for the arrangement.

According to the disclosure statement, the consolidated business will have $4.28 billion of debt, compared to $8.63 billion at the start of the Chapter 11 cases.

Treatment of creditors under the plan will include:

* Holders of $155.1 million in secured claims will receive 100% recovery in either a 5% five-year secured promissory note, the collateral securing its claim, a one-time cash payment or the right of set-off.

If holders of claims under the $107.9 million 7% West Georgia facility due June 30, 2014 do not vote to accept the plan, the holders of these claims will receive up to $30 million in cash or if the claims exceed $30 million, claimants will receive the West Georgia secured promissory note.

If West Georgia claimants do vote to accept the plan, they will receive a $45 million cash payment and rights under the West Georgia amended loan documents;

* Holders of $6.36 billion in general unsecured claims will receive 96.25% of the new common stock in the reorganized company;

* Holders of old equity interests will receive 3.75% of the new common shares in the reorganized company plus warrants to buy 10% of additional new common stock;

* All Mirant Americas Generation debt obligations will be satisfied in full and its $1.7 billion of long-term debt will be reinstated.

In addition, Mirant Americas Generation's $1.5 billion of short-term debt and other obligations will be satisfied with common stock in the reorganized parent company in exchange for 10% of the amount owed with the balance to be paid in cash.

Also under the plan, recoveries on the company's avoidance actions, including the action against Mirant's former parent, Southern Co., will trigger payments to be shared by Mirant's former creditors and shareholders on a 50/50 basis.

The plan will be funded by a $2.35 billion exit facility from JP Morgan Chase, Deutsche Bank and Goldman Sachs.

The financing includes a $1 billion working capital facility and up to $1.35 billion in financing to make cash payments to creditors of the company's Mirant Americas Generation unit.

Mirant, an Atlanta-based power company, filed for bankruptcy on July 14, 2003. Its Chapter 11 case number is 03-46590.

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