Out of an “abundance of caution,” Longview Power LLC on April 15 gave the West Virginia Public Service Commission a heads up about the change in ownership for the company related to a debt-for-equity swap recently approved by Longview’s bankruptcy court as part of a reorganization plan.
Longview holds a siting certificate issued by the commission in 2006 for its 700-MW (net) coal-fired power plant in northern West Virginia. Other Longview companies in bankruptcy have included Mepco LLC, which produces for coal the power plant.
Said the notice to the PSC: “Longview Power’s bankruptcy reorganization plan (‘Plan’) was approved by order of the United States Bankruptcy Court for the District of Delaware on March 16, 2015 (‘Confirmation Order’). Under the Plan, ‘Interests’ (generally, equity interests in Longview Power and other debtors) were to be cancelled, including the ownership interests of First Reserve Corporation in Longview Intermediate Holdings C, LLC, which in turn owned 100% of the membership interests in Longview Power.
“On April 13, 2015, the substantial consummation…of Longview’s Plan occurred, and Longview emerged from bankruptcy protection at that time. The closing of the exit financing, and the ‘Effective Date’ under the operative documents for that fmancing, occurred on that date as well. On the Effective Date, Longview Intermediate Holdings C, LLC (as defined in the Plan, ‘Reorganized Longview’), the sole owner of the membership interests in Longview Power up to that point, issued ‘New Common Equity’ for distribution to holders of certain classes of bankruptcy claims. These classes include ‘Longview Credit Agreement Claims’ and ‘DIP Facility Claims.’ Generally, holders of these classes of claims include Longview Power’s lenders. None of the new owners of Reorganized Longview owns more than 50 percent of the ownership interests. As of the Effective Date, all of Longview Power’s membership interests are owned by Reorganized Longview.
“In addition, Reorganized Longview has reserved certain amounts of New Common Equity in Reorganized Longview for distribution under a management incentive plan, but does not anticipate at this time that issuance of additional New Common Equity under this plan will materially affect the initial ownership percentages or cause any holder or holders of New Common Equity to own a majority interest in Reorganized Longview. Consequently, as of the Effective Date, First Reserve Corporation no longer has any membership interests in Longview Intermediate Holdings C, LLC, and by extension it no longer owns a majority of the membership interests in Longview Power. Instead, as of the Effective Date, Reorganized Longview owns 100% of the membership interests in Longview Power, and no entity owns 50 percent or more of the ownership interests in Reorganized Longview. For purposes of Siting Rule 7.1, Reorganized Longview (and not First Reserve) is now the ultimate majority owner of Longview Power. On the Effective Date, Longview Power retained ownership of the Siting Certificate and did not transfer or assign it incident to the Plan.
“Siting Rule 7.1 appears to require notice only in the event that the owner of an [exempt wholesale generator] facility ‘plans to transfer or assign its Siting Certificate to another entity.’ Longview Power has elected to provide this notice to the Commission. Attached to this letter is an affidavit of an authorized representative of Reorganized Longview containing the representations specified in Siting Rule 7.1. In the affidavit, Reorganized Longview confirms that Longview Power will continue to be bound by the terms and conditions of the Siting Certificate under Reorganized Longview’s majority ownership.”