| WILMINGTON, Del
WILMINGTON, Del Feb 12 Optim Energy LLC, a
Texas electric company owned by a Bill Gates investment fund,
filed for Chapter 11 bankruptcy on Wednesday after piling up
losses in a depressed power market.
The company, which owns three power plants in eastern Texas,
said in court documents it has been unable to reduce costs far
enough to stem financial losses.
"The current depressed economic environment of the electric
power industry - particularly with respect to coal-fired plants-
and the Debtors' liquidity constraints have resulted in
continuing losses that, simply put, have left the Debtors
without alternatives," Optim Chief Executive Officer Nick Rahn
said in a court papers.
Two of Optim's plants are natural-gas fired. The company may
seek to sell its coal-fired Twin Oaks plant during the course of
its bankruptcy, according to papers filed with the U.S.
Bankruptcy Court in Wilmington, Delaware.
Optim said it had $713 million outstanding under a credit
agreement with Wells Fargo. It estimated its assets were worth
less than $500 million.
The Wells Fargo agreement dates from 2007, when Optim was
created by an affiliate of Cascade Investments LLC and energy
holding company PNM Resources Inc.
Cascade is an investment vehicle controlled by Gates. PNM's
initial 50 percent stake in Optim was later cut to 1 percent
through a restructuring and eventually written off, leaving
Optim solely under the control of Cascade.
Power companies such as Optim that sell on deregulated
markets have been stung by plummeting natural gas prices, which
in turn depress prices for power. Dynegy Inc and Edison Mission
Energy both filed for bankruptcy in recent years, and Energy
Future Holdings, formerly TXU, is negotiating with creditors to
restructure $40 billion in debt.
Optim generated revenues of $236 million last year,
according to filings with the U.S. Bankruptcy Court.
To fund Optim's operations while it restructures in
bankruptcy, Cascade has proposed a $115 million
Optim has retained Bracewell & Giuliani as legal adviser,
Protiviti Inc as restructuring adviser and Barclays Capital Inc
as financial adviser.
The case is Optim Energy LLC, U.S. Bankruptcy Court,
District of Delaware, No. 14-10262