LS Power Development LLC is in advanced talks on handing control of its coal-fired Sandy Creek Energy Station in Texas to lenders in a roughly $1 billion debt restructuring, WSJ Pro Bankruptcy reported. The potential agreement being negotiated covers LS Power’s Sandy Creek Energy Associates LP, the controlling stakeholder in the Sandy Creek electric generating plant in Riesel, Texas, which would be turned over to the lenders. LS Power has been in negotiations with lenders since last year about a possible restructuring of a roughly $800 million loan and other debt obligations. If the restructuring deal is completed, lenders would take majority ownership of the power plant near Waco, while LS Power would receive roughly $50 million in return for relinquishing its equity. The tentative deal comes on the heels of a bankruptcy filing by Brazos Electric Power Cooperative Inc., a major Sandy Creek customer, and broader turmoil in the Texas energy market stemming from extreme winter weather that struck the state last month.
