FIRSTENERGY GETS $2.5 BILLION INVESTMENT FROM ELLIOTT, OTHERS

Electric utility FirstEnergy Corp said it received a $2.5 billion equity investment from a group of fund managers including Elliott Management Corp.

FirstEnergy’s shares were up 15.30 percent at $33.32 in morning trading after the company also said it would form a group to determine whether its unit, FirstEnergy Solutions, should file for bankruptcy protection.

The investment includes $1.62 billion in mandatory convertible preferred equity and $850 million of common equity, FirstEnergy Corp said.

Other investors include investment firm Bluescape, Singapore sovereign fund GIC and Zimmer Partners.

Akron, Ohio-based FirstEnergy said it would use the proceeds to reduce debt by $1.45 billion and contribute $750 million to its pension fund.

FirstEnergy Corp had $21.1 billion in debt as of Sept. 30.

Power prices have slumped in recent years in the face of cheap natural gas-powered electricity and growing demand for renewable sources of energy, forcing many companies to rethink their diversification strategies.

Moelis & Co LLC was FirstEnergy’s financial adviser and Jones Day its legal adviser, while Ropes & Gray served as Elliott’s legal adviser.

Source: Reuters

Categories: Investment,News

Tags: ,,,,,

Leave A Reply

Translate »