Illinois Power aims to restructure $300 million debt due to cash crunch; bankruptcy possible

By Susanna Moon

Chicago, Aug. 4 – Illinois Power Generating Co., or Genco, an indirect subsidiary of Dynegy Inc., may lack the cash flow to repay its $300 million debt at maturity in 2018, according to an 8-K filing with the Securities and Exchange Commission.

The company attributed the cash flow problems due to weak energy prices, unsold capacity volumes, ongoing required maintenance and environmental expenditures and upcoming interest payments.

Each company has hired advisers to begin strategic reviews of Genco.

Genco has the projected future cash flow to cover its obligations through Dec. 31 but not to repay the debt in 2018 without refinancing or restructuring.

Possible solutions include restructuring Genco’s debt, transitioning ownership of Genco’s assets to its debtholders, deferring discretionary capital expenditures, continuing to shut down uneconomic generation and seeking bankruptcy protection.

Dynegy is a Houston-based energy company.

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