NorthWestern's indenture trustee says plan undervalues company

By Jeff Pines

Washington, April 2 - NorthWestern Corp.'s reorganization plan substantially undervalues the company, said Wilmington Trust Co., the indenture trustee for the company's four series of junior subordinated deferrable interest debentures. It cautioned the court not make any immediate decisions on whether to appoint an official committee of equity holders.

Wilmington's financial advisor, Goldin Associates LLC, has helped it obtain a substantial amount of data from the company and hat even though the analysis is far from complete Wilmington believes the plan clearly undervalues NorthWestern.

Wilmington said it has no position on whether an official equity committee is formed, but it is sure there is plenty of value in the company to satisfy the subordinated debt holders.

The plan values the company at $1.5 billion.

In a motion filed with the U.S. Bankruptcy Court for the District of Delaware, Wilmington, the trustee for the TOPrS, said the low valuation leaves no value for shareholders, and that the Sioux Falls, S.D.-based utility is likely to use the valuation as a reason not to appoint an equity committee.

Last week, a group of shareholders controlling a 14.4% stake in NorthWestern asked the court to have an official equity committee appointed.

The company's plan calls for 98% of the reorganized company's common stock to go to general unsecured claims and 2% to go unsecured subordinated claims, which includes the $321 million in TOPrS claims.

NorthWestern filed for bankruptcy on Sept. 14. Its Chapter 11 case number is 03-12872.

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