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
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
Cyril Guerrera, 504/576-4238
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