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 April 17, 1998
(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
(Former name or former address, if changed since last report)
Item 5. Other Events
On April 17, 1998, the Registrant announced that its
Philippine subsidiary, CE Casecnan Water and Energy Company, Inc.
("CE Casecnan"), and Hanbo Corporation, Hanbo Engineering &
Construction Company, Ltd. and Hanbo Steel Company, Ltd.
(collectively, the "Hanbo Entities") and Korea First Bank ("KFB")
have mutually agreed to settle the differences among them related
to the Casecnan project in the Philippines. A press release
issued by the Registrant is attached hereto as Exhibit 1 and is
incorporated herein by reference.
IItem 7. Financial Statements and Exhibits
Exhibit 1 - Press Release dated April 17, 1998.
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
Dated: April 17, 1998
FOR IMMEDIATE RELEASE
Craig M. Hammett - Senior Vice President, Chief Financial Officer 402-341-4500
Craig S. Allen - Manager, Investor Relations 402-341-4500
CalEnergy Announces Settlement With
Korea First Bank and Hanbo Regarding the Casecnan Project
OMAHA, NEBRASKA, April 17, 1998 --- CalEnergy Company, Inc.
("CalEnergy" or the "Company") (NYSE: CE; PCS; LSE) announced
today that its subsidiary CE Casecnan Water and Energy Company,
Inc. ("CE Casecnan") it and Hanbo Corporation, Hanbo Engineering
& Construction Company, Ltd. and Hanbo Steel Company, Ltd.
(collectively, the "Hanbo Entities") and Korea First Bank ("KFB")
have mutually agreed to settle the differences among them related
to the Casecnan project in the Philippines. As previously
reported, the Hanbo Entities, who had been acting as turnkey
contractors and guarantors for the Casecnan project, were
terminated and replaced in May 1997 by CE Casecnan, at which time
CE Casecnan made an initial draw on the KFB letter of credit
securing the Hanbo Entities performance under the contract.
Further, since that initial draw, CE Casecnan had made three
additional draws on the letter of credit, all of which the Hanbo
Entities opposed.
As previously reported, in May 1997 CE Casecnan initiated
litigation in New York state court against KFB and last week, the
New York Appellate Division unanimously affirmed the lower
court's summary judgment in favor of CE Casecnan in that
litigation. A motion seeking to appeal that decision had been
filed by KFB. As a result of the termination of the construction
contract, the Hanbo Entities also had commenced an arbitration
proceeding with the International Chamber of Commerce.
Under the settlement, KFB has agreed to pay CE Casecnan $90
million and the parties have discontinued with prejudice the
pending arbitration and litigation proceedings and released each
other from all claims arising out of the litigation and
arbitration.
David L. Sokol, Chairman and Chief Executive Officer of
CalEnergy, stated: "We are pleased to have resolved the disputes
with KFB and the Hanbo Entities related to our Casecnan
irrigation and power project in the Philippines. The terms of
this settlement provide sufficient funds for us to complete the
project. Work on the project with the replacement contractor is
proceeding and with this contingency removed, we look forward to
focusing our full attention on successful completion and
operation of the project."
CalEnergy is a global energy company that manages and owns
interests in over 5,000 net megawatts of power generation
facilities in operation, construction and development worldwide.
Through its subsidiary Northern Electric, CalEnergy supplies and
distributes electricity and gas to 1.8 million customers in the
United Kingdom. The Company produces energy from diversified
fuel sources including geothermal, natural gas and hydroelectric.
CalEnergy conducts business in the U.S., U.K., Philippines,
Indonesia, Poland and Australia, and employs more than 4,200
people worldwide. In the year ended December 31, 1997, CalEnergy
generated revenues of over $2.2 billion and had assets of
approximately $7.5 billion.
www.calenergy.com
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