Dec 1 Dynegy Inc said it has
joined its unit Dynegy Holdings in filing a proposed plan of
reorganization with a U.S. bankruptcy court that lays out a path
for the bankrupt unit's emergence from Chapter 11 in 2012.
Dynegy Holdings, a unit of energy producer Dynegy Inc, filed
for Chapter 11 bankruptcy in November to restructure expensive
leases on power plants and lighten its debt load.
Dynegy Inc, whose shareholders include billionaire investor
Carl Icahn and investment firm Seneca Capital, and its other
subsidiaries have not filed for bankruptcy.
The reorganization plan would replace $3.4 billion in senior
notes, $200 million in subordinated notes, $130 million in
accrued interest and lease payments on the two power plants.
In exchange, the company would offer $400 million in cash,
$1 billion in new 11-percent notes due 2018 secured by equity in
the company's coal and gas-fueled generating businesses and $2.1
billion in new convertible preferred stock that would convert at
the end of 2015.
Dynegy will have the right to redeem the convertible
preferred stock at varying discounts through the end of 2013.
The plan and the accompanying disclosure statement have not
been approved by the bankruptcy court and are subject to further
negotiations with stakeholders, Dynegy said.
Once the plan is approved by the court, Dynegy Holdings will
begin soliciting its creditors for the approval, the company
The bankruptcy of Dynegy Holdings has turned the usual order
of payment for creditors upside down, as the power company tries
to protect shareholders like billionaire financier Carl Icahn at
the expense of bondholders.
The case is In re: Dynegy Holdings LLC et al, U.S.
Bankruptcy Court, Southern District of New York, No. 11-38111.