Banks Give Southern Cal Edison Three Weeks of Breathing Room

Southern California Edison and 23 banks have agreed to delay taking action until Feb. 13 on Edison's default on a line of credit, according to a Bloomberg News report.

The troubled California utility, a unit of Edison International(EIX Quote - Cramer on EIX - Stock Picks) missed $230 million of payments last week. The company said it doesn't intend to file for bankruptcy, but acknowledged the possibility it may be forced into bankruptcy involuntarily.

Throughout the crisis, California customers have been experiencing rolling blackouts. The companies have gotten into trouble, accumulating debt of $11.5 billion, because of increasing demand for power and a shortage of supplies.

Southern California Edison's financial chief said the company should have enough cash to operate for at least three weeks and said net cash flow is at least breakeven.

Also last week the company decided against declaring a quarterly dividend totaling $960,000. The dividend would have been paid at the end of next month to holders of three separate series of preferred stock.

Shares of Edison International gained 63 cents, or 7.1%, to close at $9.38 on the New York Stock Exchange trading.