Just Energy files to restructure under CCAA after taking hit from Texas winter storms

Just Energy files to restructure under CCAA after taking hit from Texas winter storms

Electricity and gas provider Just Energy Group Inc said it was restructuring under the Companies’ Creditors Arrangement Act in Canada and plans to file for Chapter 15 bankruptcy in the United States after a hit from the Texas deep freeze last month.

The company said it also reached an agreement with one of its lenders for a $125 million debtor-in-possession financing to meet its regulatory obligations in North America, including payments required by the Electric Reliability Council of Texas.

All services to customers across the Ontario-based company’s North American operations will continue without interruption and there will be no impact on customers’ bills or daily operations, Just Energy said on Tuesday.

Last month, it raised doubts about its ability to continue as a going concern and forecast a $250 million hit from the winter storms sweeping across Texas.

It had warned that increased demand for electricity and rolling blackouts forced it to balance power supply at very high clearing prices.

Electricity prices in Texas soared last week as utilities scrambled to meet a surge in heating demand during the historic winter storm and prompted regulators to cap prices.

Just Energy, which counts Pacific Investment Management Company (PIMCO) as its biggest shareholder, is the latest firm to suffer from the unusually U.S. cold weather.

Brazos Electric Power Cooperative Inc, the largest and oldest electric power cooperative in Texas, filed for bankruptcy protection in Houston last week, citing a disputed $1.8 billion debt to the state’s grid operator.

Meanwhile, Canada’s Innergex Renewable Energy and Algonquin Power & Utilities Corp, operating in the area, said they expected losses related to wind farms.

Trading was halted in Just Energy’s Canadian and U.S-listed stocks earlier on Tuesday.

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Published at Tue, 09 Mar 2021 16:47:53 +0000