NorthWestern Corp. files for bankruptcy

NorthWestern Corp., parent company of NorthWestern Energy of Montana, said Monday it has filed for Chapter 11 bankruptcy.

By the Associated Press The Missoulian

The company, which just last week said it had failed to get enough shareholder votes to issue new shares of stock, said it filed for voluntary reorganization to reduce debt, improve capital structure and ensure the long-term financial health of the utility.

The paperwork was filed in U.S. Bankruptcy Court in Delaware Sunday, the company said. Northwestern also was notified on Monday that it would be removed from the New York Stock Exchange.

NorthWestern said its Blue Dot Services Inc. and Expanets Inc. subsidiaries were not included in the Chapter 11 filing.

The company had been trying to restructure without filing for bankruptcy. But it was unable to get enough shareholder votes to approve a plan to issue up to 200 million additional shares of stock.

Officials had hoped the plan would raise badly needed cash to help pay part of NorthWestern’s $2.2 billion debt.

"Our board of directors and the new management team worked very hard to effectuate a restructuring outside of the court, and we are disappointed that we were unable to do so," Gary G. Drook, NorthWestern’s president and chief operating officer, said Monday in a news release.

"However, we believe that reorganization under Chapter 11 will enable us to address our financial challenges while we continue to operate normally in serving our utility customers."

NorthWestern does not expect any significant operational changes, staff cuts or changes in compensation or benefits as a result of the filing, officials said.

"Serving our customers remains our most important business mission, and this filing does not change our commitment to continue delivering reliable energy services," said Drook.

NorthWestern Energy bought the former Montana Power Co.’s utility transmission and distribution properties and provides gas and electricity to about 300,000 Montana customers.

A year ago, NorthWestern Corp. seemed healthy and its stock was selling for $16.48 a share. In recent months, however, its stock prices have taken steep, steady declines and currently is trading for less than $1 a share.

The company has warned for months that bankruptcy was an option.

Its second quarter financial statement released in August showed the company lost $57.8 million during the quarter, compared with a loss of $21.4 million in the comparable quarter last year.

Claudia Rapkoch, a spokeswoman for NorthWestern Energy in Butte, said the bankruptcy filing would have no immediate effects either on customers or on employees of the NorthWestern Energy.

"There are no layoffs associated with this plan," she said Monday. "All benefits and salaries remain the same. There will be no effect to our customers. We’ve got our (gas and electric) supply lined up, so we anticipate it will be very much business as usual."

"Serving our customers remains our most important business mission," Drook added, "And this filing does not change our commitment to continue delivering reliable energy services."

In a written statement, Gov. Judy Martz called the bankruptcy filing another "unfortunate chapter" in the state’s business history.

"We cannot let this situation deter us from our goals of being economically vibrant," she said.

Martz said her office would work to ensure there were no power disruptions for the consumers served by NorthWestern, that local governments would get property taxes from NorthWestern and that the company’s workers in Montana would be protected.

NorthWestern serves 600,000 customers in South Dakota, Nebraska and Montana.

On the Net:

NorthWestern: http://www.northwestern.com

Expanets: http://www.expanets.com

http://missoulian.com/articles/2003/09/15/mtracker/news/78bankrupt.txt