Exelon Generation Texas Power LLC filed for bankruptcy protection Tuesday with a plan to sell all but one of its five natural gas-fired electricity generation plants to senior lenders.
ExGen Texas and related corporate entities associated with each plant filed for chapter 11 protection in the U.S. Bankruptcy Court in Delaware. The company's bankruptcy petition lists assets of between $100 million and $500 million and liabilities of between $500 million and $1 billion. ExGen Texas is a subsidiary of Exelon Generation Co. LLC.
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The bankruptcy was initiated after ExGen Texas in May entered into a consent agreement with lenders of a $675 million senior secured loan to conduct a sale process for its assets, according to a filing with the U.S. Securities and Exchange Commission.
The lenders have agreed to exchange debt they are owed for ownership of four of the power plants. ExGen Texas said it intends to keep and continue operating its other plant, the Handley Generating Station, located in Fort Worth, Texas, in exchange for a $60 million payment to lenders. The proposed sale is subject to a bankruptcy auction process that must be overseen and approved by a judge.
ExGen Texas said "historically low power prices within Texas have created challenging market conditions for all power generators," including its plants. At least one other Texas power plant operator has filed for bankruptcy protection this year: A power plant in Temple that was developed by private-equity firm Panda Power Funds sought chapter 11 protection in April.
The ExGen Texas plants participate in the power grid managed by the Electric Reliability Council of Texas, court papers say.
ExGen Texas has filed motions in bankruptcy court to pay utilities, taxes and other ordinary business costs. ExGen Texas is also requesting permission from the court to pay up to $6 million to vendors that the company says are critical to its ongoing business operations.
"Exelon Generation remains committed to working with all stakeholders to ensure the best outcome for our employees, customers, communities and shareholders," the company said in a news release.
Judge Brendan Shannon has been assigned to the case. ExGen Texas is represented by Richards, Layton & Finger PA. The case number is 17-12377.
Write to Jonathan Randles at Jonathan.Randles@wsj.com
(END) Dow Jones Newswires
November 07, 2017 12:02 ET (17:02 GMT)