8-KRegulation FDOther Events

FIRSTENERGY CORP 8-K Report, Regulation FD Disclosure (May 9, 2018)

Filed May 9, 2018For Securities:FE

Summary

FirstEnergy Corp. (FE) is providing an update on two significant developments through this Form 8-K filing. Firstly, the company reports progress on the Chapter 11 bankruptcy proceedings of its subsidiaries, FirstEnergy Solutions Corp. (FES) and FirstEnergy Nuclear Operating Company (FENOC). An Agreement in Principle has been reached with creditor groups to resolve claims between FirstEnergy and the FES Debtors. A Standstill Agreement has also been executed, extending the settlement discussions through August 1, 2018, and imposing transfer restrictions on creditor groups to ensure support for the proposed settlement. Secondly, FirstEnergy has successfully completed the sale of its remaining generating assets, including the Bath County hydroelectric power station, to Aspen Generating, LLC. This sale generated approximately $355 million in net proceeds. In connection with this transaction, FirstEnergy's subsidiaries, AE Supply and AGC, opted to redeem their senior notes, incurring approximately $90 million in "make-whole" premiums. These actions represent a significant step in FirstEnergy's strategic shift away from commodity-based generation.

Key Highlights

  • 1FirstEnergy has reached an Agreement in Principle with creditor groups to resolve claims related to the Chapter 11 bankruptcy of FES and FENOC.
  • 2A Standstill Agreement has been entered into, extending settlement discussions until August 1, 2018, and includes terms to ensure creditor group support for the settlement.
  • 3FirstEnergy completed the sale of its interest in the Bath County hydroelectric power station for approximately $355 million in net proceeds.
  • 4The sale of the Bath County hydroelectric power station is part of the company's exit from commodity-based generation assets.
  • 5FirstEnergy's subsidiaries, AE Supply and AGC, redeemed senior notes totaling approximately $305 million and $100 million, respectively.
  • 6The company incurred approximately $90 million in "make-whole" premiums due to the optional redemption of these senior notes.

Frequently Asked Questions

FirstEnergy has reached an Agreement in Principle with creditor groups to resolve claims and has entered into a Standstill Agreement. This agreement extends settlement discussions to August 1, 2018, and includes provisions to ensure creditor group support for the settlement.

Yes, FirstEnergy has completed the sale of its remaining generating assets, including its interest in the Bath County hydroelectric power station, to Aspen Generating, LLC. This sale generated approximately $355 million in net proceeds.

In connection with the asset sales, FirstEnergy's subsidiaries redeemed senior notes totaling approximately $405 million. This resulted in the payment of approximately $90 million in "make-whole" premiums to noteholders.

These events signal significant progress in FirstEnergy's strategic objective to exit commodity-based generation and transition towards a fully regulated business. The resolution of bankruptcy-related claims and the sale of remaining generation assets are key steps in this transformation.