Securities and Exchange Commission
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act 1934
Date of Report May 7, 1997
(Date of earliest event reported)
CalEnergy Company, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-9874 94-2213782
(State of other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
302 South 36th Street, Suite 400, Omaha, NE 68131
(Address of principal executive offices) Zip Code
Registrant's Telephone Number, including area code: (402) 341-4500
N/A
Item 5. Other Events
In November 1995, a partially owned indirect subsidiary of the
Registrant ,CE Casecnan Water and Energy Company, Inc., a Philippine
corporation ("CE Casecnan"), closed the financing and commenced construction
of the Casecnan Project, a combined irrigation and 150 net MW hydroelectric
power generation project (the "Casecnan Project") located in the central part
of the island of Luzon in the Republic of the Philippines.
CE Casecnan is presently indirectly owned as to approximately 35% of its
equity by the Registrant and approximately 35% indirectly owned by Peter
Kiewit Sons' Inc. CE Casecnan financed a portion of the costs of the Casecnan
Project through the issuance of $125,000,000 of its 11.45% Senior Secured
Series A Notes due 2005 and $171,500,000 of its 11.95% Senior Secured Series B
Bonds due 2010 and $75,000,000 of its Secured Floating Rate Notes due 2002,
pursuant to an indenture dated as of November 27, 1995, as amended to date.
In its Form 8-K's dated February 25, 1997, and March 28, 1997, the
Registrant reported that it had been advised that Hanbo Corporation ("Hanbo"),
Hanbo Iron & Steel Company, Ltd. ("Hanbo Steel") and Hanbo Engineering and
Construction Co. Ltd. ("HECC") had each filed to seek court receivership
protection in South Korea. The Casecnan Project was being constructed
pursuant to a fixed-price, date-certain, turnkey construction contract (the
"Hanbo Contract") on a joint and several basis by Hanbo Corporation and HECC,
both of which are South Korean corporations. CE Casecnan announced today that
it has terminated the Hanbo Contract and CE Casecnan has entered into a new
engineer, procure and construct contract to complete the construction of the
Casecnan Project. A copy of the press release issued by the Registrant is set
forth as Exhibit 1 hereto and is incorporated herein by reference. The Hanbo
Contract has been terminated because of events of default under the contract
including the fact that both HECC and Hanbo have filed for court receivership
protection in the Republic of Korea. In connection with the Hanbo Contract
termination, CE Casecnan made a draw under the irrevocable standby letter of
credit issued by Korea First Bank ("KFB") as security under the Hanbo Contract
to pay for certain transition costs and other presently ascertainable damages
under the Hanbo Contract. If KFB were to fail to honor its obligations under
the Casecnan letter of credit, such action could have a material adverse
effect on the Casecnan Project and CE Casecnan.
CE Casecnan entered into a new turnkey engineering, procurement and
construction contract to complete the construction of the Casecnan Project
(the "Replacement Contract"). The work under the Replacement Contract will be
conducted by a consortium of contractors and subcontractors including Siemens
A.G., Sulzer Hydro Ltd., Black & Veatch and Colenco Power Engineering Ltd. and
will be headed by Cooperativa Muratori Cementisti CMC di Ravenna and Impressa
Pizzarotti & C. Spa.
Item 7. Financial Statements and Exhibits
Exhibit 1 - Press Release dated May 7, 1997
SIGNATURE
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 hereunto duly authorized.
CalEnergy Company, Inc.
By: \s\Douglas L. Anderson
Douglas L. Anderson
Assistant Secretary and
Assistant General Counsel
(U.S. and Corporate)
Dated: May 7, 1997
Exhibit 1
FOR IMMEDIATE RELEASE
John G. Sylvia - Senior Vice President, Chief Financial Officer 402-341-4500
Jeffrey S. Laudin - Manager, Investor Relations 402-341-4500
CalEnergy Announces
CE Casecnan Enters Into New EPC Contract
OMAHA, NEBRASKA, May 7, 1997 - CalEnergy Company, Inc. ("CalEnergy")
(NYSE, PSE and LSE Symbol: CE) announced today that CE Casecnan Water and
Energy Company, Inc. ("CE Casecnan"), a partially owned indirect subsidiary of
CalEnergy, has terminated its turnkey engineering, procurement and
construction contract with Hanbo Engineering & Construction Co., Ltd. ("HECC")
and Hanbo Corporation ("Hanbo") for the construction of the Casecnan project.
The contract has been terminated because of events of default under the
contract, including the fact that both HECC and Hanbo have filed for court
receivership protection in the Republic of Korea. In connection with the
termination, CE Casecnan has made a draw under the Korea First Bank letter of
credit provided as security under the contract in order to pay for certain
transition costs and other damages under the contract.
CE Casecnan has also entered into a new turnkey engineering, procurement
and construction contract to complete the construction of the Casecnan
project. The work will be conducted by a consortium of contractors and
subcontractors including affiliates of Siemens A.G., Sulzer Hydro Ltd., Black
& Veatch and Colenco Power Engineering Ltd. and will be headed by affiliates
of Cooperativa Muratori Cementisti CMC di Ravenna and Impressa Pizzarotti & C.
Spa. According to David L. Sokol, Chairman and Chief Executive Officer of
CalEnergy, "We are delighted that CE Casecnan has reached an agreement to have
this fine group of companies complete the construction of the Casecnan
project. The new agreement reflects CE Casecnan's determination to ensure
completion of this important project and to supply needed electricity and
irrigation water to the people of the Philippines."
CE Casecnan's proposed combined irrigation and 150 MW capacity
hydroelectric project is located on the island of Luzon in the Republic of the
Philippines. The project will sell electricity and water to the Philippine
National Irrigation Administration.
CalEnergy, which manages and owns interests in over 5,000 net MW of
power generation facilities in operation, construction and development
worldwide, currently operates 19 generating facilities and also supplies and
distributes electricity to 1.5 million customers.
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