International Power offers to buy part of AES Drax's restructuring debt

By Carlise Newman

Chicago, July 24 - AES Drax Holdings said International Power is offering to buy some of the debt that would be issued in AES Drax's restructuring process.

In a letter to AES Drax, International Power said its offer is a "substantial" improvement on the cash-out option described in the June 30 6-K filing with the Securities and Exchange Commission.

International Power is offering to provide up to £80 million as opposed to the £60 million proposed by AES Drax to fund the cash-out option. It is also proposing that the discount price for a senior finance party's participation in the A-2 debt will be 55% of its principal amount as opposed to the 47% proposed by AES.

In the letter, International Power said the offer is not subject to due diligence on the Drax power station, which is owned by AES Drax.

International Power said it will fund its offer from cash reserves.

If AES Drax accepts the offer, International Power said it will pay £5 million into an escrow account to support the commitment within 7 business days.

In addition, International Power said it will accept a greater amount of project funds being applied to the cash-out at the senior creditors' option.

The letter was copied to the chairman of the steering committee representing the syndicate of banks which financed the eurobond issued by AES Drax Holdings to finance the acquisition of the Drax Power Station, and to Close Brothers, financial advisors to AES Drax Holdings' senior bonds.

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