Dynegy (DYN) Shares Drop on Potential Chapter 11 Bankruptcy
Tweet
Share
E-mailGet Alerts DYN Hot Sheet
Join SI Premium – FREE
Dynegy (NYSE: DYN) shares are trading lower today, following the filing of their 10-K with the U.S. Securities and Exchange Commission yesterday which stated that they may need to seek Chapter 11 protection should they not be able to amend or replace their existing credit facility.
With their recent quarter report, the company is also ceasing to issue guidance, saying: "In light of recent management and board changes that may affect the company’s strategic plans, Dynegy currently does not intend to provide guidance estimates for 2011."
The full explanatory text about the potential bankruptcy from their 10-K is: "In light of our likely non-compliance, we are attempting to amend or replace our existing Credit Facility. If we are able to amend our Credit Facility or enter into a new facility, we expect that capacity of any such facility to be less than the current capacity of $1.8 billion and to be at a higher cost, which reduced capacity and increased costs could have a material adverse effect on our ability to successfully run our business. We may also seek additional sources of liquidity in an effort to secure sufficient cash to meet our operating needs. These additional sources of liquidity could include asset sales, public or private issuances of debt, equity or equity-linked securities, debt for equity swaps, or any combination of these. However, we cannot provide any assurances that we will be successful in accomplishing any of these plans. If we are unable to successfully execute our plan to amend or replace our Credit Facility or otherwise obtain additional sources of liquidity, it may be necessary for us to seek protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, or an involuntary petition for bankruptcy may be filed against us."
In a February 22nd announcement, Dynegy said that both their Chairman and CEO Bruce Williamson and CFO Holli Hichols had resigned. Additionally, the company said that lack of shareholder responses caused them to terminate a potential $665 million acquisition by Carl Icahn.
DYN shares are down 2.4% early today.
With their recent quarter report, the company is also ceasing to issue guidance, saying: "In light of recent management and board changes that may affect the company’s strategic plans, Dynegy currently does not intend to provide guidance estimates for 2011."
The full explanatory text about the potential bankruptcy from their 10-K is: "In light of our likely non-compliance, we are attempting to amend or replace our existing Credit Facility. If we are able to amend our Credit Facility or enter into a new facility, we expect that capacity of any such facility to be less than the current capacity of $1.8 billion and to be at a higher cost, which reduced capacity and increased costs could have a material adverse effect on our ability to successfully run our business. We may also seek additional sources of liquidity in an effort to secure sufficient cash to meet our operating needs. These additional sources of liquidity could include asset sales, public or private issuances of debt, equity or equity-linked securities, debt for equity swaps, or any combination of these. However, we cannot provide any assurances that we will be successful in accomplishing any of these plans. If we are unable to successfully execute our plan to amend or replace our Credit Facility or otherwise obtain additional sources of liquidity, it may be necessary for us to seek protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, or an involuntary petition for bankruptcy may be filed against us."
In a February 22nd announcement, Dynegy said that both their Chairman and CEO Bruce Williamson and CFO Holli Hichols had resigned. Additionally, the company said that lack of shareholder responses caused them to terminate a potential $665 million acquisition by Carl Icahn.
DYN shares are down 2.4% early today.
Create E-mail Alert Related Categories
Insiders' Blog, Trader TalkRelated Entities
Carl Icahn, BankruptcySign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
