Daily News: September 3, 2013

Alvarez & Marsal Advise Longview Power Restructuring

Longview Power announced that it and certain of its affiliates, including Mepco Holdings and its affiliates, commenced Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. Both Longview and Mepco intend to operate their businesses as they continue to negotiate a chapter 11 plan with their lenders to de-risk their balance sheet.

Alvarez & Marsal is serving as the company’s restructuring advisor, and Kirkland & Ellis is the primary restructuring counsel.

When able to operate at full capacity, Longview’s 700 megawatt supercritical coal fired power generation facility is one of the most efficient coal-fired power plants in the country and has one of the lowest air emissions profiles of any such power plant. Construction failures and defects have prevented the power plant from operating reliably at its designed capacity.

Longview’s Mepco affiliate and its predecessors have engaged in coal mining and processing operations in and around West Virginia for more than 50 years. Currently, Mepco owns or operates three active underground coal mines and one active surface mine located in northern West Virginia and southwestern Pennsylvania.

“After careful consideration of available alternatives, the company determined that filing for Chapter 11 was a necessary and prudent step that allows us to strengthen and operate our businesses without interruption while continuing to restructure the company’s balance sheet,” said Jeffery Keffer, CEO of Longview Power. “The company has been in consensual negotiations with our senior lenders toward a Chapter 11 plan to maximize value; those negotiations remain ongoing. We remain confident that the Company and our lenders will reach an agreement on the terms of a Chapter 11 plan in the near term.”

“I want to make clear that we will continue to conduct business as usual and our operations and employees will not be affected by the Chapter 11 filing,” Jim Laurita, Jr., CEO of Mepco added. “We will continue to provide our customers with the level of service they have come to expect from this great company and its employees. This is the best option the company has to negotiate its balance sheet with the Company’s lenders.”
The company has filed customary, so-called “first day” motions to ensure the company obtains the benefits of the Chapter 11 filing and continues to operate its business in the ordinary course and without interruption. The company expects that these motions will be heard by the Court immediately after Labor Day and will continue to operate in the ordinary course in the meantime. Employees should expect that all payroll and benefits will continue as they have without interruption.

To read a related Reuters story click here.