UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 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): December 23, 1998
KENETECH CORPORATION
(Exact Name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
33-53132 94-3009803
(Commission File Number) (I.R.S. Employer
Identification No.)
500 Sansome Street, Suite 410
San Francisco, California 94111 94111
(Address of principal executive offices) (Zip Code)
(415) 398-3825
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On December 23, 1998, KENETECH Energy Systems, Inc., a Delaware corporation
("KES"), a wholly-owned subsidiary of KENETECH Corporation, a Delaware
corporation (the "Registrant"), sold its indirectly owned 50% equity interest in
a partnership that owns a gas-fired cogeneration facility of approximately 540
MW currently under construction in Penuelas, Puerto Rico (the "EcoElectrica
Project") and other associated contract rights (collectively, the "EcoElectrica
Interest") to Edison Mission Energy, an unrelated party. The EcoElectrica
Project also includes a liquefied natural gas import terminal and storage
facility, a desalination plant and assorted ancillary facilities. The sale was
made pursuant to a Stock Purchase and Assignment Agreement, dated as of December
23, 1998, by and among KES and certain of its affiliates and Edison Mission
Energy and one of its affiliates.
The EcoElectrica Interest was sold for cash and assumption of a KES equity
funding commitment in the approximate aggregate amount of $247 million. The
consideration received for the EcoElectrica Interest was determined from an
auction solicitation for such interest conducted by KES's and the Registrant's
financial advisor. The proceeds have been used (i) to satisfy and discharge in
full, in the amount of approximately $145.5 million, the Registrant's 12 3/4%
Senior Secured Notes due 2002 after acceleration by the Trustee for such notes,
on December 23, 1998, of the unpaid principal thereof in the face amount of $100
million, accrued and unpaid interest and fees and expenses, (ii) in payment in
full of a development loan for the EcoElectrica Project in the approximate
amount of $27 million, (iii) in payment of $6.5 million to KENETECH Windpower,
Inc., a wholly-owned subsidiary of the Registrant ("KWI"), under the terms of a
Settlement Agreement and Release approved by the Bankruptcy Court having
jurisdiction over KWI's chapter 11 proceeding, and (iv) in payment of costs of
sale of the EcoElectrica Interest of approximately $11 million.
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.
KENETECH Corporation
(Registrant)
Date: January 6, 1999 By: _________________________________
Mark D. Lerdal
President and Chief Executive Officer
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