Dominion Takeover of SCANA (Santee: buying, go bankrupt, contractors)

[blktoptrvl]

The ads currently playing on TV say that Dominion will pay off about 1.3B in SCANA debt for the nuclear debacle. They are also offering an incentive to the rate payers of $1000 each.

To take over SCANA won't they also have to pay current stock holders some premium on their stock?

After all that paying though, won't that leave another 8B in debt for the failed plants? Who is expected to pay for that?

1. Dominion Stockholders?
2. SCANA Stockholders?
3. South Carolina Tax Payers?

They are offering 7.9 Billion for all of SCANA. If that pays off the plants, wouldn't that mean that Dominion has now picked up the entire SCANA system - which has many other assets - for nothing?

7.9B (Dominion Offer for SCANA) - 5.3 (SCANA Market Cap) = 2.6B
2.6B - 1.3B (Payed for Nuclear Plants) = 1.3B (Total $1000.00 amount to be paid to ratepayers?)

And if they Buy SCANA assets for a total of 7.9B won't that include the 1.3B they are offering to payoff the unfinished plants? Basically paying for them from the same money they say they are buying SCANA for?

Has anyone been following this closely and have a grip on what the offer truly is made of?

[jrrjbl]

The real question is the 18% add on to the monthly bill. Is it gone immediately or its the penalty or smoke and mirrors of the deal. To date the status of the shareholder's value is they would be kept whole, when in fact they should take the hit but is not being mentioned.

My guess, we will be paying for the full 30 years. My monthly hit is on average $40/mo uplift. Example for 20 years the impact is $9600 for this one house.

Logically the State should let them go bankrupt on the deal, stiff Westinghouse and their debt holders. The state should take over the the system and either sell it clean or run it under subcontractors.

I think the decision delay is absolutely ridiculous.

[Carolina Knight]

SCANA Corporation and Santee Cooper are disasters. They spent their way into debt on projects they cannot finish.

[jrrjbl]

Frankly I am missing why the protection of shareholders??? I have a reasonable portfolio and bankruptcies are on the table at all times. Its the risk/reward.

I wonder what percentage of "important people" are shareholders. I think any politician or government official who touches this pile should be required to disclose any financial ownership and recuse themselves.

[blktoptrvl]

Originally Posted by jrrjbl

Frankly I am missing why the protection of shareholders??? I have a reasonable portfolio and bankruptcies are on the table at all times. Its the risk/reward.

I wonder what percentage of "important people" are shareholders. I think any politician or government official who touches this pile should be required to disclose any financial ownership and recuse themselves.

I think this is probably the issue.

[WhitewaterVol]

Originally Posted by jrrjbl

Frankly I am missing why the protection of shareholders??? I have a reasonable portfolio and bankruptcies are on the table at all times. Its the risk/reward.

I wonder what percentage of "important people" are shareholders. I think any politician or government official who touches this pile should be required to disclose any financial ownership and recuse themselves.

This company should absolutely be allowed to go bankrupt and wipe out the shareholders in the process. Unfortunately, we as a country have adopted a model where corporate risk is bailed out by the tax payer while corporate reward is reaped by the shareholders and CEOs. Normal capital markets are somewhat self-correcting because the shareholders and CEOs are reluctant to take risks that may result in bankruptcy. Once you remove that risk, you remove one of the major self-correcting forces in the capital system and you encourage risky behavior.

The bail out of AIG and the major banks from the last financial crisis was a huge mistake. Every one of those companies should have been taken through a controlled bankruptcy process that ensured those that made unacceptable risks shouldered the financial downfall for those risks. Instead, many of those who made those insane risks emerged from the crisis as wealthy people with their cushy high paying jobs intact.

[blktoptrvl]

Here is a decent primer...

Q&A on SCE&G nuclear reactors, SC government, financial details | The State