A longtime First Reserve Corporation asset has filed for Chapter 11 restructuring, after struggling with more than $1 billion in debt.
Bankrupt Longview Power went live in December 2011. First Reserve in 2006 teamed with power plant developer GenPower to fund Longview, a 700-megawatt (MW) coal-fired power project located in Maidsville, West Virginia.
The total project size for Longview totaled more than $2 billion, according to a 2009 Infrastructure Investor report, including a $900 million equity component, $500 million of which came from First Reserve Fund XI. Longview is the largest-ever project in West Virginia, according to the company's website.
The plant earned a purported $255 million in a 12-month period ending in June, but Longview in a statement revealed faulty construction kept the project from operating at full capacity. In addition, demand for coal is low.
Meanwhile, Longview, which filed for Chapter 11 protection in a Delaware court, will not cease operation, with chief executive Jeffrey Keffer claiming in a statement that the company can emerge with a “plan in the near term”. A spokesman for Longview declined additional comment.
A Wall Street Journal report about Longview claimed $557 million of its $1.2 billion in debt was set to mature in February, noting financial services firm Citigroup is a lender. A spokeswoman for First Reserve declined comment. Headquartered in Greenwich, Connecticut, private equity firm First Reserve has $23 billion in assets under management.
First Reserve, a specialist in energy and energy infrastructure, sold 10.75 percent of its stake in Longview in 2009 to Siemens Financial Services.