Longview Power LLC is proposing to get out of bankruptcy by way of a chapter 11 plan that drops $1 billion in debt from its balance sheet and provides money to cover the cost of fixing the problem-plagued plant, Dow Jones Newswires reported yesterday. Outlined in court papers yesterday, Longview's restructuring proposal has the support of senior lenders who have agreed to swap some of their debt for equity in a reorganized company. Some of them have signed up to provide a $150 million loan to fund Longview's exit from Chapter 11, as well as fix the plant and keep it running, saving some 650 jobs in the process. The new loan and the chapter 11 plan marks a way out for Longview not just from bankruptcy but from a looming cash crunch. With some $58 million worth of letter of credit borrowing power locked up in a dispute with contractors, and a plant running at partial capacity, Longview has warned of possible irreparable harm if the financing does not go through.
