Bankruptcy News For - March 22, 1996

  1. SWEPCO, GSU, co-op members submit proposal to end Cajun Electric bankruptcy
  2. Trustee mulls a number of proposals for Cajun Electric

SWEPCO, GSU, co-op members submit proposal to end Cajun Electric bankruptcy

            SHREVEPORT, La. -- March 22, 1996 -- Southwestern
        Electric Power Company (SWEPCO), Gulf States Utilities Company
        (GSU), and the Members Committee of href="chap11.cajun.html">Cajun Electric Power
        Cooperative, Inc.
, have filed a joint proposal to bring an end to
        the Cajun bankruptcy proceeding.  

            SWEPCO is a wholly owned subsidiary of Central and South West
        Corporation (NYSE:CSR).  GSU is a wholly owned subsidiary of Entergy
        Corporation (NYSE:ETR).  The Members Committee represents 10 of the
        12 Louisiana distribution cooperatives that are served by Cajun, a
        generation and transmission cooperative.  The co-ops purchase
        wholesale electricity from Cajun and provide service to a population
        of 1 million people in 56 of the state's 64 parishes.  

            The joint proposal was submitted March 8, 1996, in response to a
        formal bid procedure established by Ralph Mabey, the trustee for
        Cajun appointed by Judge Frank Polozola of the U.S. District Court,
        Middle District of Louisiana.  

            "SWEPCO, GSU and the Members Committee filed the joint proposal
        because we believe that together we can provide a long-term solution
        for many complex issues involved in the bankruptcy," said SWEPCO
        President and Chief Executive Officer Richard H. Bremer.  

            "Ours is a high-road approach that is unique in at least three
        important ways:

            In the joint proposal, SWEPCO would purchase Cajun's non-nuclear
        assets, including a three-unit coal plant (Big Cajun II) and a two-
        unit natural gas plant (Big Cajun I), and would serve the member co-
        ops through new wholesale power-supply agreements at significantly
        lower rates.  A spokesperson for the Members Committee stated that
        the average residential customer may see a decrease in monthly
        billings of as much as 20 to 25 percent, which will allow them to
        enjoy rates comparable to those of their neighbors that are served
        by municipal and investor-owned utilities.  

            The joint proposal also will resolve disputes between GSU and
        Cajun over the River Bend nuclear generating station.  GSU owns 70
        percent of River Bend and operates the plant; Cajun owns 30 percent.
        As part of the proposal, GSU, which is Cajun's second largest
        creditor, would release its claims against Cajun and would allow
        Cajun to convey its 30 percent ownership in River Bend to GSU with
        decommissioning obligations fully funded by Cajun.  

            "Providing a solution to the complex legal issues between GSU
        and Cajun is a hallmark of the joint proposal," said Frank Gallaher,
        president of GSU.  "It is significant because litigation was
        expected to take several years and be costly to all sides."  

            Members of the Louisiana Public Service Commission have
        expressed their support for a proposal that would provide
        competitively priced wholesale power for the co-ops so as to reduce
        rates for their customers throughout the state.  The LPSC has been
        furnished with information concerning the proposal, and the parties
        have sought the commission's support.  

            The trustee for Cajun has indicated that he expects to select a
        lead proposal by April 8 and to file a plan of reorganization with
        the bankruptcy court on or before April 22, 1996.  The timing and
        completion of the transactions proposed by SWEPCO, GSU and the
        Members Committee will depend on bankruptcy court approval of a
        reorganization plan and any required regulatory approvals.  

        CONTACT:  Southwestern Electric Power Company
                  Peter Main, 318/673-3530
                  Central and South West Corporation
                  Gerald R. Hunter, 214/777-1165
                  Entergy Corporation
                  Cyril Guerrera, 504/576-4238

Trustee mulls a number of proposals for
Cajun Electric

            BATON ROUGE, La. -- March 22, 1996 -- Ralph R.
        Mabey, the Chapter 11 Trustee appointed by the United States
        District Court for the Middle District of Louisiana in connection
        with the bankruptcy proceedings of href="chap11.cajun.html">Cajun Electric Power Cooperative
        Inc. ("Cajun"), issued the following statement today regarding the
        procedure for submission of proposals for the disposition of Cajun's

            "I have received a number of excellent proposals for the assets
        of Cajun and I continue to evaluate these proposals with the
        assistance of my financial advisors, Wasserstein Perella & Co. Inc.
        I am confident that one or more of these proposals can form the
        basis for the plan of reorganization which I am to file by April 22,
        1996.  The plan will provide fair recoveries for Cajun's creditors
        in a manner consistent with substantial rate relief for Cajun's
        Member cooperatives.  No settlement of the Cajun bankruptcy,
        including the Trustee's litigation with Gulf States Utilities
        concerning the River Bend nuclear generating station, has been
        reached by any party with either the Trustee or Cajun's creditors."

        CONTACT: Wasserstein Perella & Co. Inc.
                 Keith Lord, 212/969-2700