8-K/AOther Events

EDISON INTERNATIONAL 8-K/A Report (Jul 11, 2001)

Filed July 11, 2001For Securities:EIX

Summary

This amended 8-K filing from Edison International (EIX) dated July 11, 2001, details significant financing and divestiture activities aimed at addressing upcoming debt maturities and improving the company's financial position. A key event is the issuance of $800 million in 13.50% Senior Secured Notes due 2008 and a $385 million senior secured term loan by its subsidiary Mission Energy Holding Company. The proceeds are earmarked for repaying EIX's 2001 maturing debt, including the full repayment of a $618 million bank credit facility that had faced cross-defaults linked to Southern California Edison Company. Furthermore, Edison International is actively divesting non-core assets. The company has agreed to sell Edison Select, which provides residential security and electrical warranty services, to ADT Security Services, Inc., with an expected completion in August 2001. Additionally, a letter of intent is in place to sell substantially all assets of Edison Source, a commercial energy management provider, to its current management. These divestitures are projected to result in a net after-tax write-off of $117 million in the second quarter of 2001. The company forecasts total cash sources of $1.331 billion for the remainder of 2001, enabling repayment of further debt obligations and expected to leave a cash balance of approximately $46 million by year-end.

Key Highlights

  • 1Edison International's subsidiary, Mission Energy Holding Company, raised $800 million through 13.50% Senior Secured Notes and secured a $385 million term loan to address 2001 debt maturities.
  • 2The company fully repaid its $618 million bank credit facility using proceeds from the new debt issuance, resolving previous cross-default issues tied to Southern California Edison Company.
  • 3Edison International is selling its subsidiary Edison Select, engaged in residential security and electrical warranty services, to ADT Security Services, Inc., with a targeted closing in August 2001.
  • 4A letter of intent has been signed to sell substantially all assets of Edison Source, a commercial energy management business, to its current management.
  • 5The divestiture of Edison Select and Edison Source is expected to generate approximately $210 million in net proceeds after transaction costs.
  • 6These sales are anticipated to result in a net after-tax write-off of $117 million in the second quarter of 2001.
  • 7Edison International projects total cash sources of $1.331 billion for the remainder of 2001, covering upcoming debt obligations and expected operating expenses, with a projected year-end cash balance of $46 million.

Frequently Asked Questions

The primary purpose is to generate sufficient cash to repay Edison International's maturing debt obligations in 2001, including a significant bank credit facility and other notes. The financing and divestitures are part of a strategy to improve the company's liquidity and financial stability.

The repayment of the $618 million bank credit facility resolved cross-defaults that were linked to Southern California Edison Company and terminated the facility. This action removed outstanding defaults related to Edison International and provided a cleaner financial standing.

Edison International is selling Edison Select, which provides residential security and electrical warranty repair services, to ADT Security Services, Inc. It is also selling substantially all assets of Edison Source, a commercial energy management business, to its current management. These sales are expected to yield about $210 million in net proceeds but will result in a net after-tax write-off of $117 million in the second quarter of 2001.

The company expects total cash sources of $1.331 billion from existing cash, new financing, asset sales, and other expected inflows. This amount is projected to cover upcoming debt payments and operating expenses, leading to an estimated cash balance of approximately $46 million by December 31, 2001.