27 June 2002 – CMS Energy said Wednesday that it is to restructure its energy marketing unit and cut 50 jobs as part of a series of steps aimed at boosting its cash flow and improving its balance sheet.
CMS is under investigation for “round-trip” trading in the energy market that inflated revenue by $4.4bn in 2000 and 2001. Moody’s down graded its credit rating earlier this month over fears that CMS might not be able to refinance its $450m credit facility.
The restructuring of the energy marketing unit effectively means shutting down the speculative energy trading business with the loss of 25 per cent of the workforce.
CMS lowered its earning forecast to between $1.50 and $1.55 per share compared to analysts expectations of $1.68, excluding the impact of asset sales and restructuring charges. Shares slid almost 14 per cent on the news.
CMS is also to sell its energy performance contracting subsidiary, CMS Viron, as well as Trunkline’s one-third ownership interest in the Centennial Pipeline, an interstate petroleum products line. The company said it had already sold off $2.4bn in assets.
CMS also announced on Wednesday that Rodger Kershner, its general counsel and senior vice-president, resigned effective immediately.