NorthWestern Corp., the holding company for a Montana combination utility, may have trouble continuing as viable business depending on the outcome of its ongoing Chapter 11 bankruptcy proceeding, according to the company’s 10-Q Securities and Exchange Commission filing earlier this month.

In the Nov. 14, filing NorthWestern said its survival depends on at least three key developments: (1) acceptance of its reorganization plan by a federal bankruptcy court, (2) complying with the terms of an $85 million loan it received at the outset of its Chapter 11 filing last Sept. 14, and (3) generating enough cash for its operations, nonutility asset sales and financing restructuring to meet all of its obligations.

While the company’s senior executives have publicly maintained the company would successfully emerge from bankruptcy, the SEC filing takes a starkly different tone. With its utility operations, NorthWestern Energy continues serving 300,000 electricity and 160,000 natural gas customers in Montana.

NorthWestern last year bought Montana Power Co.’s utility transmission and distribution businesses for $1.1 billion. The company by its own description is “highly leveraged,” and it said in the SEC filing that this circumstance would be likely to continue even after it emerged from Chapter 11. The amount of debt “could have a material adverse effect on our business, financial condition, results of operations and cash flows,” the company said in the SEC filing.

One onerous offshoot of the heavy debt it is carrying could be the inability of NorthWestern to adequately invest in the utility operations in the future. And the company said it could also “increase our vulnerability to general adverse economic and industry conditions.”

When it filed for Chapter 11 two months ago, the company said its goal was to emerge as a “financially stable, investment-grade energy company.”

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