NEW ORLEANS, Feb. 11 /PRNewswire-FirstCall/ -- Entergy Corporation (NYSE: ETR) announced today that it was not able to successfully remarket its Senior Notes, Series A due February 17, 2011 (the "Notes"), which form part of its outstanding 7.625% Equity Units (NYSE: ETRPrA). Holders of Equity Units are not required to take any actions to settle the Purchase Contracts that are a component of the Equity Units as a result of the inability to successfully remarket the Senior Notes.
Securities law considerations prevented Entergy from proceeding with a remarketing during the remarketing period prescribed for the Notes.
As previously described in our press release of February 3, 2009, announcing fourth quarter earnings, fully diluted earnings per share calculations reflected in the release assumed a successful remarketing. Pursuant to generally accepted accounting principles, since the remarketing did not succeed, the number of shares to be issued under the Purchase Contracts which are included in the Equity Units should be included in the fully diluted earnings per share calculation for 2008, causing the number of shares to increase compared to the amount reflected in the release.
The Purchase Contracts for Entergy Common Stock that are a component of the Equity Units provide for settlement on February 17, 2009 (the "Purchase Contract Settlement Date"). The current holders of Equity Units have the right (the "Put Right") to require Entergy to purchase the Notes that are components of the Equity Units on the purchase contract settlement date at a price per Note to be purchased equal to the principal amount of such Note, plus accrued and unpaid interest to, but excluding the Purchase Contract Settlement Date (the "Put Price"). The Put Right will be deemed to be automatically exercised unless the holder delivers a notice to The Bank of New York Mellon, as purchase contract agent, of its intention to settle the related Purchase Contracts with cash prior to 5:00 p.m., New York City time, on February 12, 2009 and pay the Purchase Price for such Notes as described above prior to 5:00 p.m., New York City time, on February 13, 2009, all in accordance with the procedures outlined in the Purchase Contract and Pledge Agreement relating to the Equity Units and in Supplemental Indenture No. 1 relating to the Notes. If the holder does not elect to settle the related Purchase Contracts with cash in lieu of its Put Right, the holder will be deemed to have elected to apply a portion of the proceeds of the exercise of the Put Right with respect to the Notes that are components of Equity Units equal to the Purchase Price against the holder's obligations to pay the aggregate Purchase Price for the shares of Common Stock of Entergy to be issued under the related Purchase Contracts in full satisfaction of the holder's obligations under the Purchase Contracts. Any portion of the Put Price remaining following satisfaction of the related Purchase Contracts will be paid to the holder.
In addition, Entergy Corporation announced today the settlement rate for the Purchase Contracts. Holders of Equity Units will receive 0.6598 shares of Entergy common stock for each Purchase Contract and cash in lieu of fractional shares. The settlement rate is based upon the average of the closing price per share of Entergy common stock on the New York Stock Exchange for the 20 consecutive trading days ending on February 11, 2009. Since the average closing price per share was lower than the "threshold appreciation price," as defined under the terms of the equity units, the settlement rate is 0.6598.
As a result, on February 17, 2009, each holder of the Equity Units will purchase from Entergy 0.6598 shares of Entergy common stock per equity unit for $50.00. No holder will be required to make any additional cash payment.
Settlement of the Purchase Contracts will result in Entergy issuing approximately 6.6 million shares of common stock.
As a result of the settlement of the Purchase Contract component of the Equity Units, the Equity Units will cease trading on the New York Stock Exchange before the opening of the market on February 17, 2009.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
