UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 25, 1998
Commission Registrants; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification
No.
1-11327 Illinova Corporation 37-1319890
(an Illinois Corporation)
500 S. 27th Street
Decatur, IL 62521
(217) 424-6600
1-3004 Illinois Power Company 37-0344645
(an Illinois Corporation)
500 S. 27th Street
Decatur, IL 62521
(217) 424-6600
Total number of sequentially numbered pages is 7.
1
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Item 7. Exhibits
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(c) Exhibits
(99.1) Letter to the Financial Community,
dated November 24, 1998
(99.2) Press Release, dated November 24, 1998
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ILLINOVA CORPORATION
(Registrant)
By /s/ Larry F. Altenbaumer
---------------------------
Larry F. Altenbaumer
Chief Financial Officer
Treasurer and Controller
on behalf of
Illinova Corporation
Date: November 25, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ILLINOIS POWER COMPANY
(Registrant)
By /s/ Larry F. Altenbaumer
---------------------------
Larry F. Altenbaumer
Senior Vice President and
Chief Financial Officer
on behalf of
Illinois Power Company
Date: November 25, 1998
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Exhibit Index
The following Exhibits are hereby filed as part of this Current Report on Form
8-K:
Exhibit
Number Description
99.1 Letter to the Financial Community,
dated November 24, 1998
99.2 Press Release, dated November 24, 1998
4
EXHIBIT 99.1
Larry F. Altenbaumer
Chief Financial Officer,
Treasurer and Controller
Illinova Corporation
500 South 27th Street
P.O. Box 511
Decatur, IL 62525-1805
Tel 217 424-6678
Fax 217 362-7417
November 24, 1998
Members of the Financial Community:
Illinova/Illinois Power Company (Company) has received Security and Exchange
Commission (SEC) concurrence regarding the use of quasi-reorganization
accounting treatment in the event that the Company decides to sell or shutdown
the Clinton Power Station (Clinton). Attached is the Company's press release
announcing the decision of the SEC.
The announcement of the SEC's concurrence with the accounting treatment proposed
by the Company should not be considered as tantamount to a decision on the
status of Clinton. However, the receipt of such concurrence by the SEC is a very
important factor as the Company's Board of Directors evaluates the options of
continued operation, sale or shutdown of the nuclear generating station. The
Board will be reviewing these options at its December 9 meeting and may make a
decision on the option to be pursued at the time.
Please refer to the Company's most recent 10-Q filed with the SEC for the
quarter ending September 30, 1998, for a more complete description and the
potential implications of a quasi-reorganization. Since approval of the
quasi-reorganization accounting treatment is only one factor the Board will
consider in reaching a decision regarding Clinton, the Company is not in a
position at this time to provide any new guidance as to the financial
consequences of a Clinton sale or shutdown and the application of
quasi-reorganization accounting.
Please contact Bob Schultz (217-424-8780), Eric Weekes (217-362-7635), Cindy
Steward (217-362-7633) or me if you have any questions.
Sincerely,
/s/ Larry F. Altenbaumer
Larry F. Altenbaumer
EXHIBIT 99.2
For release: Nov. 24, 1998
ILLINOIS POWER RESOLVES FINANCIAL ISSUE SURROUNDING
POTENTIAL SALE OF ITS CLINTON POWER STATION
Accounting treatment for nuclear exit clarified
DECATUR, Ill. (Nov. 24, 1998) -- Illinois Power announced today it has
resolved a financial issue that would need to be addressed in the event it
decides to sell or shut down the Clinton Power Station, its 950-megawatt nuclear
generating facility.
Illinois Power Controller Cindy G. Steward said the company is considering
writing up the value of its fossil generating assets and writing down the value
of its nuclear assets to reflect current market values, a move that would be
taken only in conjunction with a decision to exit the nuclear business.
The Securities and Exchange Commission this week confirmed for Illinois
Power that such an accounting procedure would be acceptable if the company
decides to exit the nuclear business. This determination removes a significant
uncertainty and alleviates financial difficulties that otherwise could stem from
the sale or shutdown of the plant.
"Our goal is to resolve the financial risks of operating a single-unit
nuclear plant," Steward said. "The SEC's concurrence with this accounting
treatment is valuable input to our board's decision. This can give us an
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ILLINOIS POWER
Nov. 24, 1998
Page 2
opportunity for a fresh start as we position Illinois Power and Illinova for
swiftly changing and increasingly competitive energy markets."
This accounting procedure, called a quasi-reorganization, is a transaction
whereby a company restates the value of all its assets and liabilities to
current market value. This would require the company to write down to market
value the Clinton Station -- whose current book value, net of tax, is
approximately $1.6 billion but whose market value is considerably less -- and
write up to market value its fossil generating stations -- older assets that
have been depreciated to a book value of approximately $500 million but whose
market value is far greater. The write-down of the company's nuclear assets
would result in a charge to earnings while the fossil write-up would be a direct
increase to equity.
Illinois Power's Board of Directors likely will make a decision by year's
end regarding the Clinton Station. Exploring a potential sale is just one of the
alternatives the company is evaluating. Other options include continuing to own
and operate the plant, closing it, or forming a consortium with other nuclear
station operators.
