by: Andrew Schneider, March 10, 2011 10:03:00 am
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Houston-based power company says it may have to file for bankruptcy if it can't meet certain earnings requirements by its creditors this year. Andrew Schneider has the story.
Dynegy has alerted the Securities and Exchange Commission that it’s unlikely to meet its threshold for earnings before taxes and debt, particularly for the second half of the year. It announced a loss of $234 million for 2010, following a $1.2 billion loss in 2009.
“The most likely scenario is something where they find an investor who is interested in the company, who thinks that they could maybe run it better, and then that investor could provide financing in bankruptcy court or buy it in bankruptcy court.”
Chris Lafakis, an economist with Moody’s Analytics.
Dynegy has appointed four new directors to its board — two nominated by billionaire investor Carl Icahn and two by Seneca Capital. Icahn and Seneca each own about 10% of Dynegy’s shares.
The company has tried twice to sell itself. Its chairman and CEO stepped down last month after the second attempt failed.