By Peg Brickley
Homer City Generation LP, which has three coal-fired electric plants, filed for chapter 11 bankruptcy protection Wednesday to implement a restructuring that will erase $600 million in secured debt from its balance sheet.
The Indiana, Pa., company said in a statement that its reorganization plan, which is subject to bankruptcy-court approval, has the support of 86% of its secured bondholders. Homer City's plants operate near Pittsburgh and are staffed by NRG Energy Services, which will remain in place as the plant operator.
Pre-negotiated chapter 11 cases are popular, cutting down on the time and money companies spend in bankruptcy court. Essential terms are agreed to in advance and sometimes the ballots have already been counted by the time a company files for bankruptcy protection.
Trade and general unsecured creditors are being promised payment in full, which means there's no need to solicit their votes on Homer City's plan. Pennsylvania's Clean Air Fund is the largest unsecured creditor, owed $1.1 million, court papers say.
Homer City signed up secured bondholders to a restructuring agreement and was in the process of rounding up votes on the plan when it filed for chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del.
As a limited partnership, Homer City is run by general partner EFS HC GP, LLC, an entity indirectly owned by General Electric Co. Other indirectly-owed GE affiliates own most of Homer City, while Metropolitan Life Insurance Co. owns nearly 5% of the limited partnership interests, court papers say.
The case number is 17-10086. Homer City is being advised by the law firm of Richards Layton & Finger, financial adviser PJT Partners and restructuring adviser Zolfo Cooper Management. The bondholder group is being advised by the law firms of O'Melveny and Myers and Young Conaway Stargatt & Taylor. Houlihan Lokey is providing financial advice to the bondholders.
Write to Peg Brickley at email@example.com
(END) Dow Jones Newswires
January 11, 2017 08:57 ET (13:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.