TECO Energy says pre-pack Chapter 11 likely for Union, Gila projects

By Jeff Pines

Washington, Dec. 6 - TECO Energy Inc. said a pre-packaged Chapter 11 is likely for its Union and Gila River projects.

The Tampa, Fla.-based power company reported the possibility in a Monday filing with the Securities and Exchange Commission.

The company had planned to transfer ownership of the power stations to its lending group, but snags preventing the transfer remain over the post-transfer structure of the projects, TECO said.

TECO needs 100% of the its lenders' support for the transfer, but a Chapter 11 restructuring only needs the support of more than half the lenders representing two-thirds of the debt.

The request for change of ownership approval was filed with the Federal Energy Regulatory Commission on Sept. 30, and management said it does not believe any change in the application would be necessary if a Chapter 11 filing takes place.

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