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FirstEnergy Bankruptcy Agreement Approval Sought

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FirstEnergy Solutions filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing FirstEnergy Nuclear Operating Company (FENOC) to assume a uranium purchase and sale agreement.

The motion explains, “As set forth in the Borland Declaration, FENOC is party to the Macquarie Contract with Macquarie, wherein FENOC has agreed to purchase uranium hexafluoride (‘UF6’) from Macquarie for delivery in 2019 and 2020.”

In addition, “The Debtors believe that the Macquarie Contract is a ‘forward contract’ and that Macquarie is a ‘forward contract merchant.’ Thus, if the Macquarie Contract is not assumed by the Debtors, Macquarie will be able to terminate the Macquarie Contract, retain the $9.9 million in cash collateral that it holds as of April 12, 2018, and offset such amount against its damages claim. FENOC provides cash collateral to Macquarie under the Macquarie Contract for the difference between the contracted for purchase price of UF6 (the ‘Purchase Price’) and the market rate for UF6. Given the heavily regulated nature of UF6 and the limited number of suppliers, allowing the Macquarie Contract to terminate or alternatively, rejecting the Macquarie Contract, incurring damages that could be in excess of the cash collateral that Macquarie is currently holding, and then returning to the market to find an alternative supplier would be expensive and time-consuming.”

The Court scheduled a May 7, 2018 hearing on the motion.

Read more FirstEnergy bankruptcy news.

The post FirstEnergy Bankruptcy Agreement Approval Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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