Infrastructure

Reliant Energy Eliminates a Credit Facility (RRI, CEG, BRK.A)

Reliant_logoLate on Friday, Reliant Energy (NYSE:RRI) announced that it had terminated a $300 million retail working capital facility with Merrill Lynch. The company had failed to meet its EBITDA covenant on the agreement in the third quarter, and had received a waiver of the covenant through December 5th.

The company said that it terminated the facility because it "is anappropriate way to address any possible issues that might be raisedregarding compliance with this covenant." Yeah, like Reliant is likelyto miss the EBITDA target again.

Reliant noted that it has $1.6 billion in liquidity, about $421 millionof which is credit not including the terminated facility. Reliant hasalready said that it is pulling of of its wholesale and commercialmarkets, and that the company’s board is exploring "strategicalternatives" including selling of part or all of the company.

This story has been going on for a while now, but Reliant does not seemto be having any luck selling itself. Maybe once the Constellation(NYSE:CEG) deal with either Berkshire Hathaway (NYSE:BRK.A) or EDF is settled, a line will begin to form for Reliant.

Paul Ausick
December 8, 2008

Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.