Longview Power (the “Company”) achieved an important milestone on May 22nd when Judge Shannon of the United States Bankruptcy Court for the District of Delaware issued an order confirming the Company’s prepackaged chapter 11 plan of reorganization after a brief uncontested hearing.
Longview Power filed bankruptcy protection on April 14th citing debt maturities occurring during an extended period of unprecedented low energy prices and the economic effects of the COVID-19 pandemic on the power generation industry. The Company commenced its cases with the support of its secured lenders after months of discussion between the Company, its secured lenders, and its equity owners. The Company’s plan of reorganization was unanimously supported by the Company’s senior secured lenders and no objections were filed.
Under Longview Power’s reorganization plan, $350 million of secured and subordinated debt will be extinguished, existing equity will be cancelled, and the Company’s senior secured debt holders will become its new equity owners. Upon emergence from bankruptcy, Longview Power will receive a $40 million term loan funded by its new owners to support its expected working capital and capital needs for the next five years. All other creditors of the Company, as well as the Company’s employees, are unaffected by the plan. The Company will emerge from bankruptcy once certain governmental filings and approvals occur, expected by mid-summer.
Jeffery Keffer, CEO of Longview Power, stated, “Significant hard work and cooperation by the Company’s senior secured creditors, the Company’s existing equity holders, the Company, and their professionals were critical to making confirmation happen so quickly. The overwhelming support shown for the plan reflects the unique and special characteristics of the Longview Power plant, one of the cleanest coal fired power plants in the world and a highly reliable and low cost producer of electricity in West Virginia and the PJM region. With this plan of reorganization in place and the financial support of its new owners, Longview Power will be well positioned to build its planned natural gas and solar powered facilities and become a leading ‘all of the above’ power producer for many years to come.”