Dynegy, which has warned for months about its financial troubles, said bankruptcy could be the next step if it could not reach an agreement with its creditors.
The revelation, contained in a regulatory filing on Tuesday, is the latest indication of the depth of Dynegy’s problems.
Last month, Dynegy’s top executives, including its chief executive, Bruce A. Williamson, and chief financial officer, Holli C. Nichols, resigned in the wake of several failed attempts to sell the company.
In the latest takeover attempt, Carl C. Icahn offered $5.50 a share. Despite extending the offer several times, the bid expired without sufficient shareholder support.
Dynegy now says that its financial problems are reaching a breaking point. The company posted a loss of $234 million in 2010 and reported negative cash flow as natural gas prices remained low.
In its annual 10-K filing on Tuesday, the company said it was attempting to renegotiate with creditors and come up with additional capital. To improve its liquidity position, Dynegy is also considering selling assets or issuing securities.
“If we are unable to successfully execute our plan to amend or replace our credit facility or otherwise obtain additional sources of liquidity,” the company said in its 10-K filing, “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.”
Dynegy has been trying to sell itself, in part to reduce its $4.6 billion debt load. Last year, the Blackstone Group offered $5 a share for the company. But Mr. Icahn and another major shareholder, Seneca Capital, blocked the deal, calling the price inadequate.
Seneca Capital was again the voice of dissent concerning Mr. Icahn offer of $5.50 a share, which Seneca described as the “wrong price at the wrong time for the wrong reasons.” The firm said it would not even accept a price of $6 a share.
Correction: An earlier version of this article incorrectly stated that Seneca would accept a price of $6 a share. The firm said it would not even accept a price of $6 a share.
The revelation, contained in a regulatory filing on Tuesday, is the latest indication of the depth of Dynegy’s problems.
Last month, Dynegy’s top executives, including its chief executive, Bruce A. Williamson, and chief financial officer, Holli C. Nichols, resigned in the wake of several failed attempts to sell the company.
In the latest takeover attempt, Carl C. Icahn offered $5.50 a share. Despite extending the offer several times, the bid expired without sufficient shareholder support.
Dynegy now says that its financial problems are reaching a breaking point. The company posted a loss of $234 million in 2010 and reported negative cash flow as natural gas prices remained low.
In its annual 10-K filing on Tuesday, the company said it was attempting to renegotiate with creditors and come up with additional capital. To improve its liquidity position, Dynegy is also considering selling assets or issuing securities.
“If we are unable to successfully execute our plan to amend or replace our credit facility or otherwise obtain additional sources of liquidity,” the company said in its 10-K filing, “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.”
Dynegy has been trying to sell itself, in part to reduce its $4.6 billion debt load. Last year, the Blackstone Group offered $5 a share for the company. But Mr. Icahn and another major shareholder, Seneca Capital, blocked the deal, calling the price inadequate.
Seneca Capital was again the voice of dissent concerning Mr. Icahn offer of $5.50 a share, which Seneca described as the “wrong price at the wrong time for the wrong reasons.” The firm said it would not even accept a price of $6 a share.
Correction: An earlier version of this article incorrectly stated that Seneca would accept a price of $6 a share. The firm said it would not even accept a price of $6 a share.
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