The Federal Energy Regulatory Commission on April 2 approved a latest debt-for-equity transaction related to the nearly-completed effort by Longview Power LLC, operator of a coal-fired power plant in northern West Virginia, to emerge from bankruptcty protection.
On March 3, Longview Power had filed an application requesting authorization for a transaction in which funds and investment accounts managed by Third Avenue Management LLC will acquire up to a 20% indirect equity interest in Longview. Third Avenue will acquire the equity interest in connection with a bankruptcy restructuring transaction, certain aspects of which were already authorized by the commission.
Under the restructuring, the current equity interests in Longview Power’s direct parent, Longview Intermediate Holdings C LLC, will be cancelled and the debt held by certain of applicant’s lenders under two separate credit facilities will be converted into equity interests in a reorganized Longview C (called “Reorganized Longview C”). Third Avenue’s acquisition of up to 20% of the equity of Reorganized Longview C would close simultaneously with the restructuring. But if the commission has not yet authorized the transaction by the time the restructuring closes, Longview Power stated that Third Avenue would acquire a less than 10% interest in Reorganized Longview C, an acquisition which applicant claims does not require commission authorization.
Longview Power is the owner of the Longview Facility, a 755-MW supercritical pulverized coal-fired facility located in Maidsville, West Virginia. The Longview Facility is interconnected with the West Penn Power transmission system, which is under the operational control of PJM Interconnection.
Longview and related companies in bankruptcy, inncluding coal producer Mepco LLC, have recently had their reorganization plan approved by their bankruptcy court and are in the final stages of emerging from Chapter 11 protection.