Dynegy completes reorganization, emerges from Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Oct. 2 - Dynegy Inc. has completed its Chapter 11 reorganization and emerged from bankruptcy, according to a company news release.

According to a filing with the U.S. Bankruptcy Court for the Southern District of New York, Dynegy's plan of reorganization, which was confirmed by the court on Sept. 10, took effect on Monday.

The company said it will have roughly $800 million of liquidity in the form of cash and letter-of-credit capacity available to support its post emergence operations and commercial activities.

Dynegy said this, along with the elimination of more than $4 billion in debt through the Chapter 11 process, gives it one of the strongest balance sheets in the independent power producers sector.

The reorganized company's common stock and warrants to purchase common stock are expected to be listed with and begin trading on the New York Stock Exchange on Oct. 3 under the symbols DYN and DYNw, respectively, the release said. The reorganized company will have about 100 million shares outstanding.

Looking ahead

"Dynegy is well positioned for success, and we are committed to creating value for our investors," president and chief executive officer Robert C. Flexon said in the release.

"With the Chapter 11 process behind us, our focus is exclusively on executing our forward strategy.

"With our balanced asset portfolio, along with operational, commercial and financial discipline and our dedicated workforce, we are confident that we will deliver favorable results in the current as well as future market environments."

Plan terms

As previously reported, Dynegy Holdings, LLC merged with and into Dynegy Inc. on Sept. 30 as part of the reorganization.

Under the Chapter 11 plan, in exchange for the elimination of more than $4 billion of debt and other obligations, unsecured creditors are receiving common equity representing a 99% stake in the reorganized company and $200 million in cash.

Legacy stockholders are receiving a 1% stake in the reorganized Dynegy and five-year warrants to purchase up to 13.5% of the common stock of the reorganized company at an exercise price of $40 per share.

Dynegy said it expected to begin distributions of stock and cash to creditors and stockholders in accordance with the plan on Oct. 2.

The reorganized company will have 15.6 million warrants outstanding, with shares of common stock authorized and reserved for issuance on a one-for-one basis, as well as 6.1 million shares of common stock authorized and reserved for issuance for distributions to be made under Dynegy's employee incentive plan.

Creditor treatment

Treatment of creditors under the joint plan will include the following:

• Holders of administrative claims, settling creditor professional fee claims, priority tax claims, priority claims, convenience claims and secured claims will be paid in full;

• Holders of a Dynegy administrative claim will receive a share of a settlement stock pool and warrants;

• Holders of general unsecured claims will receive a share of a class 3 stock pool, allocated facilities sale proceeds and a plan cash payment; and

• Holders of securities claims and equity interests will receive no distribution.

According to the release, Dynegy Northeast Generation, Inc., Hudson Power, LLC, Dynegy Danskammer, LLC and Dynegy Roseton, LLC did not emerge from bankruptcy on Monday and remain under Chapter 11 protection.

Dynegy filed for bankruptcy on July 6. Dynegy Holdings and four subsidiaries filed for bankruptcy on Nov. 7, 2011 under case number 11-38111.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.