Summary
On November 7, 2017, Exelon Generation Company, LLC, through its subsidiary ExGen Texas Power, LLC ("EGTP"), filed for Chapter 11 bankruptcy protection. This filing is part of an orderly sales process for EGTP's assets, which had been previously classified as held for sale and subject to impairment charges. The bankruptcy is intended to facilitate the sale of EGTP's assets, with proceeds primarily used to cover administrative costs, operational expenses, and repayment of EGTP's non-recourse senior secured debt. As a result of the bankruptcy filing, Exelon and Generation will deconsolidate EGTP's assets and liabilities from their financial statements. Exelon anticipates recognizing a pre-tax gain on this deconsolidation, estimated between $125 million and $200 million, in the fourth quarter of 2017. Concurrently, Generation has entered into an agreement to acquire EGTP's Handley Generating Station for approximately $60 million, subject to bankruptcy court approval and a potential auction process.
Key Highlights
- 1ExGen Texas Power, LLC (EGTP), a subsidiary of Exelon Generation, filed for Chapter 11 bankruptcy on November 7, 2017.
- 2This filing is part of a previously initiated orderly sales process for EGTP's assets.
- 3Exelon and its subsidiary have recorded pre-tax impairment charges totaling $458 million ($418 million in Q2 2017 and $40 million in Q3 2017) related to EGTP's assets classified as held for sale.
- 4EGTP's assets and liabilities will be deconsolidated from Exelon's and Generation's financial statements as of November 7, 2017.
- 5Exelon expects to recognize a pre-tax gain on deconsolidation of $125 million to $200 million in Q4 2017.
- 6Exelon Generation entered into an asset purchase agreement to acquire the Handley Generating Station for approximately $60 million, subject to court approval.
- 7The bankruptcy proceedings are subject to the approval of the Bankruptcy Court and involve various third-party interests, including creditors and regulators.