Exhibit 99.1
[NORTHWESTERN CORPORATION LOGO] News Release
Contacts:
Investors/Media:
Roger Schrum
605-978-2848
roger.schrum@northwestern.com
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NORTHWESTERN CORPORATION RECEIVES BANKRUPTCY COURT APPROVAL
OF PLAN OF REORGANIZATION
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SIOUX FALLS, SD - Oct. 8, 2004 - NorthWestern Corporation today announced that
the U.S. Bankruptcy Court for the District of Delaware has issued an oral ruling
confirming the Company's Second Amended and Restated Plan of Reorganization
("the Plan") in all respects and overruling all objections to the Plan. The
effective date for the Plan is expected to be in the next several weeks, at
which time NorthWestern will emerge from Chapter 11.
Gary G. Drook, President and Chief Executive Officer of NorthWestern, said,
"This is a tremendous day for the "new" NorthWestern. Our financial
restructuring, which was one of the most expeditious of any utility company
undergoing this process, has enabled us to significantly reduce our debt and
continue providing our customers with the dependable service they expect without
having to increase distribution rates. I am pleased that we have been able to
accomplish our objectives quickly and efficiently, and I am excited about the
future of this company."
Upon emergence, the Plan contemplates that NorthWestern will have an enterprise
value of approximately $1.5 billion. The Company's debt will be approximately
$900 million upon emergence, which is a decrease of approximately $1.3 billion
from approximately $2.2 billion as of Dec. 31, 2003. The Plan contemplates that
the Company's equity position will be approximately $710 million.
As previously announced, NorthWestern's financial reorganization will be
achieved through a debt-for-equity swap. Upon the Plan's effective date,
NorthWestern's existing common stock will be cancelled, and no distribution will
be available for current shareholders. The terms of the Plan include:
o Holders of senior unsecured notes of the Company and general unsecured
claims in excess of $20,000 will receive, pro rata, 92 percent of newly
issued common stock.
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Oct. 8, 2004
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o Holders of NorthWestern's Trust Originated Preferred Securities, and other
subordinated creditors who so choose, will be eligible to receive, pro
rata, 8 percent of the common stock and warrants exercisable for an
additional 13 percent of the common stock in the reorganized NorthWestern.
o Unsecured convenience claims of $20,000 or less each will be paid in full
in cash.
o Holders of secured bonds, including the Company's First Mortgage, Pollution
Control and Gas Transition Bonds, will not be impaired and will be
reinstated.
o Environmental claims will be not be impaired and will be satisfied in full.
With respect to the Milltown Dam Superfund site, the Company will fulfill
its obligations consistent with the previous court-approved settlement.
The Company said that its newly issued common stock will be listed on a major
exchange upon or shortly following the Company's emergence from Chapter 11.
NorthWestern will announce the new stock symbol and date on which trading will
begin in the near term. The Plan anticipates that the reorganized company's new
Board of Directors will consider paying a dividend on the new common stock,
although there can be no assurance if or when a dividend will be paid.
About NorthWestern
NorthWestern Corporation (OTC Pink Sheets: NTHWQ) d/b/a NorthWestern Energy is
one of the largest providers of electricity and natural gas in the Upper Midwest
and Northwest, serving more than 608,000 customers in Montana, South Dakota and
Nebraska.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
On one or more occasions, we may make statements in this news release regarding
our assumptions, projections, expectations, targets, intentions or beliefs about
future events. All statements other than statements of historical facts,
included or incorporated by reference herein relating to management's current
expectations of future financial performance, continued growth, changes in
economic conditions or capital markets and changes in customer usage patterns
and preferences are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. On Sept. 14, 2003, NorthWestern Corporation filed a voluntary petition for
relief under the provisions of Chapter 11 of the Federal Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware. On May 4, 2004, our
subsidiary, Netexit, Inc. (f/k/a Expanets, Inc.) filed a voluntary petition for
relief under the provisions of Chapter 11 of the Federal Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware.
Words or phrases such as "anticipates," "may," "will," "should," "believes,"
"estimates," "expects," "intends," "plans," "predicts," "projects," "targets,"
"will likely result," "will continue" or similar expressions identify
forward-looking statements. Forward-looking statements involve
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Page 3
risks and uncertainties which could cause actual results or outcomes to differ
materially from those expressed. We caution that while we make such statements
in good faith and we believe such statements are based on reasonable
assumptions, including without limitation, management's examination of
historical operating trends, data contained in records and other data available
from third parties, we cannot assure you that our projections will be achieved.
Factors that may cause such differences include but are not limited to:
(i) our common stock will be cancelled and our trust preferred
securities will be restructured in a manner that will
eliminate or very substantially reduce any remaining value.
The sale of noncore assets does not change the fact that our
common stock has no value. Accordingly, we urge that
appropriate caution be exercised with respect to existing and
future investments in any of our liabilities and/or
securities;
(ii) our ability to successfully develop, prosecute, confirm and
consummate a plan of reorganization, emerge from bankruptcy
as a going concern and avoid liquidation under the Federal
Bankruptcy Code;
(iii) risks associated with third parties seeking and obtaining
Bankruptcy Court approval for the appointment of a Chapter 11
trustee or to convert the case to a Chapter 7 proceeding;
(iv) our ability to operate pursuant to the terms of our
debtor-in-possession financing facility arranged by us with
Bank One, N.A. (the DIP Facility) and any replacement
facility and other financing and contractual arrangements;
(v) our ability to obtain Bankruptcy Court approval with respect
to material motions in the Chapter 11 proceeding from time to
time;
(vi) our ability to obtain the support of certain subordinated and
equity stakeholders of the company for a plan of
reorganization, which may be difficult in light of our
inability to preserve any material value in our common equity
and our trust preferred securities in a plan of
reorganization;
(vii) our ability to offset the negative effects that the filing
for reorganization under Chapter 11 has had, or may have, on
our business, management and employees including constraints
placed on available capital;
(viii) our ability to obtain and maintain normal terms with vendors
and service providers;
(ix) our ability to maintain contracts, including leases, that are
critical to our operations;
(x) the potential adverse impact of the Chapter 11 case on our
liquidity or results of operations;
(xi) our ability to develop a long-term strategy and our ability
to fund and execute our business plan;
(xii) our ability to avoid or mitigate an adverse judgment against
us in (1) that certain lawsuit seeking to recover assets on
behalf of Clark Fork and Blackfoot LLC filed by Magten Asset
Management Corporation and Law Debenture Trust of New York
and (2) that pending litigation styled as the McGreevey et al
v. The Montana Power Company;
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(xiii) our ability to avoid or mitigate material uninsured monetary
judgments, or other adverse judgments, against us in (1) the
shareholder class action lawsuit relating to the disposition
of the generating and energy-related assets by The Montana
Power Company, excluding our acquisition of the electric and
natural gas transmission and distribution business formerly
held by The Montana Power Company, together with ERISA
litigation regarding The Montana Power Company Employee Stock
Ownership Plan and 401(k) plan and (2) existing shareholder
and derivative litigation or any additional litigation and
regulatory action, including the initiation by the Securities
and Exchange Commission (SEC) of a formal investigation, in
connection with the restatement of our 2002 quarterly
financial statements, any of which could have a material
adverse affect on our liquidity, results of operations and
financial condition;
General Factors
(xiv) our ability to maintain an effective internal controls
structure;
(xv) our ability to attract, motivate and/or retain key employees;
(xvi) potential additional adverse federal, state, or local
legislation or regulation or adverse determinations by
regulators, including the final order of the Montana Public
Service Commission (MPSC) disallowing the recovery of $6.2
million of natural gas costs we incurred during the 2003
tracker year, and an interim order disallowing the recovery
of approximately $4.6 million of natural gas costs during the
2004 tracker year, which has had and could continue to have a
material adverse affect on our liquidity, results of
operations and financial condition;
(xvii) unscheduled generation outages, maintenance or repairs which
may reduce revenues and increase cost of sales or may require
additional capital expenditures or other increased operating
costs;
(xviii) unanticipated changes in commodity prices or in fuel supply
costs or availability due to higher demand, shortages,
weather conditions, transportation problems or other
developments, in combination with reduced availability of
trade credit, may reduce revenues or may increase operating
costs, each of which would adversely affect our liquidity;
(xix) increases in interest rates, which will increase our cost of
borrowing;
(xx) adverse changes in general economic and competitive
conditions in our service territories; and
(xxi) certain other business uncertainties related to the
occurrence of natural disasters, war, hostilities and the
threat of terrorist actions.
We have attempted to identify, in context, certain of the factors that we
believe may cause actual future experience and results to differ materially from
our current expectation regarding the relevant matter or subject area. In
addition to the items specifically discussed above, our business and results of
operations are subject to the uncertainties described under the caption "Risk
Factors" which is a part of the disclosure included in Item 2 of our Quarterly
Report on Form 10-Q entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
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From time to time, oral or written forward-looking statements are also included
in our reports on Forms 10-K, 10-Q and 8-K, Proxy Statements on Schedule 14A,
press releases and other materials released to the public. Although we believe
that at the time made, the expectations reflected in all of these
forward-looking statements are and will be reasonable, any or all of the
forward-looking statements in this news release, our Quarterly Reports on Forms
10-Q, reports on Forms 10-K and 8-K, our Proxy Statements on Schedule 14A and
any other public statements that are made by us may prove to be incorrect. This
may occur as a result of inaccurate assumptions or as a consequence of known or
unknown risks and uncertainties. Many factors discussed in this news release,
certain of which are beyond our control, will be important in determining our
future performance. Consequently, actual results may differ materially from
those that might be anticipated from forward-looking statements. In light of
these and other uncertainties, you should not regard the inclusion of a
forward-looking statement in this news release or other public communications
that we might make as a representation by us that our plans and objectives will
be achieved, and you should not place undue reliance on such forward-looking
statements.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
However, your attention is directed to any further disclosures made on related
subjects in our subsequent annual and periodic reports filed with the SEC on
Forms 10-K, 10-Q and 8-K and Proxy Statements on Schedule 14A.
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