Homer City Generation LP, which operates an 1,884-MW coal plant in Pennsylvania, announced Oct. 3 that it has entered into a forbearance agreement with certain holders of its outstanding secured notes.
Homer City said it believes this agreement provides the company additional time as it continues to engage in “constructive discussions” with certain noteholders regarding a comprehensive financial restructuring with the intent to significantly deleverage its balance sheet and provide for an orderly transition of its ownership.
General Electric (NYSE: GE) acquired the plant in 2012 from a company, EME Homer City, affiliated with Edison Mission Energy. It has been working lately to sell the plant.
Under the terms of the forbearance agreement, over 75% of the holders of the company’s outstanding 8.137% Senior Secured Notes due 2019 and 8.734% Senior Secured Notes due 2026 (collectively called the “Notes”) have agreed to forbear from exercising any and all remedies available to them as a result of the company not making the payment due on the Notes on Oct. 3. The forbearance agreement will expire upon the earlier of 11:59 p.m. (Eastern Standard Time) on Oct. 17, or the occurrence of certain events specified in the forbearance agreement, unless further extended by the parties.
Homer City said it expects to continue to operate its facilities and meet its obligations in the ordinary course.
Homer City Generation is engaged in the business of operating and selling energy and capacity from its three coal-fired units and related facilities located near Pittsburgh, Pennsylvania, with an aggregate net capacity of 1,884 MW. The plant sells its baseload power into wholesale power generation markets in the PJM Interconnection and New York ISO regions.