ALLEGHENY ELECTRIC MAY NOT BANKRUPT - Restructure Being Considered

(01/12/2003)

This area's electric company, Allegheny Energy, is close to a debt-restructuring deal that would keep the utility from going bankrupt and avoid seeking bankruptcy protection. Representatives of the company and creditor groups have agreed on a deal that allows existing lenders and bondholders to inject $470 million dollars into the company. The Wall Street Journal cites anonymous sources saying those funds would solve the company's liquidity problems, at least for now. In exchange, creditors would receive collateral on about $1.7 billion of existing credit, which is currently unsecured. Maryland-based Allegheny Energy has customers in parts of Maryland, Ohio, Pennsylvania, Virginia and West Virginia.

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