Dynegy, the Houston energy company that in March warned that it may have to file for bankruptcy, is expected as soon as Monday to float a debt issue that would replace its existing loans and extend maturities — a move that, if successful, would give it breathing room to orchestrate a turnaround, The Post has learned.
The utility, in which billionaire investor Carl Icahn owns a sizable stake, has a market cap of roughly $750 million with net debt of $4.4 billion. Its loans, meanwhile, due 2015, are trading at 81 cents on the dollar; others, due in 2019, are at 72 cents.
A refinancing of the massive debt load is in the works and is expected to hit the market as soon as Monday, according to two sources familiar with the matter.
They declined to give specifics on the pending deal.
Over the last year, Dynegy and its former board backed takeover offers from two of Wall Street’s biggest titans that shareholders had rejected, believing management was trying to sell out cheaply in order to get oversized golden parachutes.
First, shareholders in November rejected the Blackstone Group’s $5 a share offer, and then in February stopped Icahn’s $5.50 proposal.
Dynegy shares closed yesterday at $6.62, up 6.1 percent, after spiking in the midafternoon after nypost.com broke news of the possible debt restructuring.
Since foiling Icahn, hedge fund Seneca Capital, which was instrumental in blocking both deals, has replaced the board and the management team.
New CEO Robert Flexon has brought in much of the team that ran NRG Energy. New Jersey-based NRG expressed interest last year in buying Dynegy’s natural-gas-fired power plants and Dynegy will have the freedom to sell those assets in the refinancing, a source said. jkosman@nypost.com