MidAmerican sends emergency payment to shore up operations
Constellation Energy Group expects to receive a $1 billion reprieve from its credit crisis today, collecting an emergency payment as part of a $4.7 billion takeover by Warren Buffett's MidAmerican Energy Holdings, even as questions linger about a possible counteroffer.
The $1 billion payment, which MidAmerican Chief Executive Officer Gregory E. Abel said should happen today, is designed to assuage worries on Wall Street about Constellation's ability to post collateral to shore up its energy trading operations. Constellation has scheduled an 11 a.m. conference call today with analysts.
Constellation officials would not comment yesterday on hints that the French utility Electricite de France might make an offer to buy the company. The French company, which owns 9.5 percent of Constellation and is its largest shareholder, said Friday it was considering options for maintaining control over the company.
Officials at EDF did not respond to requests for comment yesterday. Several reports in the French media indicated the company has cooled to the idea of pursuing Constellation, but they could not be confirmed.
Regulations of the U.S. Nuclear Regulatory Commission, which licenses American nuclear power plants, prohibit transfer of a reactor license to any company "owned, controlled or dominated by an alien, a foreign corporation or a foreign government."
Commission spokesman Dave McIntyre said the rule would essentially prohibit a company like EDF, which is based in Paris and controlled by the French government, from owning more than half of an American nuclear facility. A joint bid with a U.S. company might satisfy the requirement, but any arrangement would have to be approved by the commission.
Constellation is the parent company of Baltimore Gas and Electric.
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