MORGANTOWN, W. Va., April 14, 2020 /PRNewswire/ -- Longview Power LLC has filed for Chapter 11 bankruptcy protection under a prepackaged reorganization plan as a result of substantially lessened demand for electricity due to long term power-pricing pressure caused by cheap natural gas, an unseasonably warm winter, and the COVID-19 pandemic and resulting economic impact, which collectively have severely depressed power prices. The Company will continue to operate in the ordinary course as it quickly restructures its balance sheet. Over 85% in interest of the Company's senior secured lenders support the Company's prepackaged Chapter 11 reorganization plan, which will substantially lessen the cost and time required for this restructuring.
The current unprecedented low energy prices in PJM has prompted Longview to take this step to facilitate the efficient transition of ownership to its senior secured lenders through a restructuring and deleveraging of its balance sheet to eliminate its now unsustainable debt burden, and through the plan Longview will enter into a $40 million new money exit facility. Longview's reorganization plan provides for the continued payment of all vendors in the ordinary course of business.
Jeffery Keffer, CEO, stated, "This filing is unfortunate but necessary given the current depressed power prices, which have further dropped more recently due to the terrible COVID-19 pandemic sweeping the nation and dramatic effects of the pandemic on the economy. We are fortunate to have strong support from our senior secured lenders who under the plan will become our owners and provide needed financing. As a result, we are not planning any changes to our staffing, we expect to pay vendors in the ordinary course during the Chapter 11 process, and we will continue to operate as productively as ever. Further, we do not anticipate any change in the development of the Longview natural gas and solar projects as the two expansion project entities are not included in this Chapter 11 bankruptcy filing."
Longview is the most efficient and lowest cost coal-fired power plant in PJM and one of the most environmentally compliant and cleanest coal plants globally. The Longview expansion projects with the existing power facility will create a 2000 MW clean energy center using diverse fuels to cleanly generate electricity. Longview expects to continue to serve PJM and millions of its customers for many years to come.
SOURCE Longview Power, LLC