ARCHIVE

Longview and Mepco file for bankruptcy

A WEST Virginia power company and its affiliated coal company filed for Chapter 11 bankruptcy Fri...

Staff Reporter
Longview and Mepco file for bankruptcy

Longview Power and coal miner Mepco Holdings said they intended to continue operations while working to “de-risk” their balance sheet.

The 700Mw Longview power plant is one of the nation's newest and cleanest coal-fired power plants. More than $500 million of its $2 billion price tag was dedicated to environmental and air-quality controls.

The plant was funded by a $1 billion equity investment by First Reserve Corp, a private equity firm, and about $1 billion in debt. About $557 million of that debt matures in February, according to documents filed in the US Bankruptcy Court in Delaware.

Longview blamed its bankruptcy primarily on “construction failures and defects” that delayed the plant’s commencement date, preventing “the power plant from operating reliably and at its designed capacity”

Longview CEO Jeffery Keffer called the bankruptcy filing a necessary and prudent step to strengthen the business.

“The company has been in consensual negotiations with our senior lenders toward a Chapter 11 plan to maximize value. Those negotiations remain ongoing,” Keffer said.

“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.”

Both companies said there would be no interruption to business and employees would not be affected by the Chapter 11 filing.

Mepco has engaged in coal mining and processing operations in and around West Virginia for more than 50 years. Mepco owns or operates three active underground coal mines and one active surface mine in northern West Virginia and southwestern Pennsylvania.

“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,” Mepco CEO Jim Laurita Jr added.

GenPower Holdings is Longview's ultimate parent.

The company has engaged Lazard as its investment banker and Alvarez & Marsal North America as its restructuring adviser.

Longview is represented by Kirkland & Ellis LLP, as primary restructuring counsel, and Dentons US LLP for all issues related to company's pending arbitration proceedings.

The case is in Longview Power LLC, Case No. 13-12211, US Bankruptcy Court, District of Delaware.

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production