Lightstone Generation LLC, a power company that operates one of the largest coal-fired electricity plants in the U.S., is preparing to ask lenders to let the struggling company push off an upcoming debt repayment, WSJ Pro Bankruptcy reported. The company, a joint venture between private-equity firms ArcLight Capital Partners and Blackstone Group, is planning to launch a debt exchange within days that would push out the maturity of the bulk of its $1.7 billion term loan by three years to 2027. To entice lenders to hold on to Lightstone’s debt, the company is offering sweeteners, including requiring it to channel any excess cash flow to pay down the new loan until the company reduces its debt load to about half of current levels. Lightstone is also offering a $100 million paydown immediately if at least 90% of its existing lenders agree. Investment bank Jefferies LLC and law firm Kirkland & Ellis LLP are advising Lightstone on the effort, while law firm Milbank LLP is advising a group of lenders. The proposed refinancing is seen as a test of investors’ willingness to back issuers tied to coal at a time when some large capital providers have pledged to steer clear of companies responsible for heavy carbon emissions.
