Tags: dynegy | power | bankruptcy

Dynegy Holdings Said to Discuss Bankruptcy Filing

Monday, 07 Nov 2011 04:42 PM

Dynegy Inc.’s holding unit is discussing a prepackaged bankruptcy filing with lenders, according to a person with knowledge of the plans.

Dynegy Holdings may seek protection from creditors as soon as this week, said the person, who asked not to be identified as the process is private. Houston-based Dynegy, which has $82 million in lease payments due Tuesday, is receiving restructuring advice from Lazard Ltd., the person said.

The parent company would avoid bankruptcy and shareholders wouldn’t be harmed, according to the Wall Street Journal, which reported on the plan under discussion earlier Monday.

Dynegy, which has racked up $1.7 billion in losses since 2009, warned of bankruptcy risk eight months ago, after a takeover offer from Carl Icahn fell apart. Last week, the third-largest U.S. independent power producer scrapped a September plan to exchange as much as $1.25 billion of outstanding bonds for new notes and cash with a lower face value after not enough investors agreed to the terms.

Katy Sullivan, a spokeswoman for Dynegy, declined to comment.

The company was downgraded to “underperform” from “neutral” by Macquarie Group Ltd. last month because of concern over bankruptcy.

Dynegy’s shareholders in February rejected a $665 million bid from Icahn against the advice of the board, which had said there were risks to continuing as an independent company. The shareholders had also previously rebuffed a bid from Blackstone Group LP.

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Dynegy Inc. s holding unit is discussing a prepackaged bankruptcy filing with lenders, according to a person with knowledge of the plans.Dynegy Holdings may seek protection from creditors as soon as this week, said the person, who asked not to be identified as the process...
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Monday, 07 Nov 2011 04:42 PM
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