FirstEnergy seeks $2.5 billion investment from Elliott, Bluescape, GIC and Zimmer

FirstEnergy Corp asserted to seek $ 2.5 billion investment from prominent investors like Elliott Management Corporation (Elliott), Bluescape, GIC, and Zimmer Partners, LP (Zimmer) including $1.62 billion in mandatory convertible preferred equity and $850 million of common equity.

FirstEnergy previously divulged that it is expected to issue at least $1.5 billion of common equity through 2019. As a result, the company does not anticipate the need to issue additional equity through the end of 2020 outside of its stock investment plans and employee benefits programs.

According to the plan, FirstEnergy will form a Restructuring Working Group to enhance value and certainty to FirstEnergy while minimizing the timing to exit competitive generation.

Charles E. Jones, president and chief executive officer of FirstEnergy.  “Elliott and Bluescape have proven value-added expertise and investment acumen in power and utility restructurings.  This investment will enable us to accelerate FirstEnergy’s growth and infrastructure improvement plans for our transmission and distribution business, which will benefit our six million customers.”

Jeff Rosenbaum, portfolio manager at Elliott.  “We are supportive of FirstEnergy’s transition to a pure-play collection of pristine, fully regulated utility companies.  We believe a strengthened balance sheet, coupled with the creation of the RWG, will assist in navigating this transition and lead to tremendous value creation and certainty for FirstEnergy shareholders.”