AES unit files for bankruptcy

AES Eastern Energy, a subsidiary of AES Corp. (NYSE: AES), filed for Chapter 11 bankruptcy on January 3. AES Corp. also agrees to sell its 675 MW coal-fired power plant in Somerset, N.Y. to bond holders as part of a $300 million deal.

AES Eastern Energy operates more than 1,000 MW of capacity at four facilities in New York. The company blamed a depressed power generation market in the state that cut into revenues and led to two years of losses. In February 2011, AES announced it was selling four coal-fired power plants with a total generating capacity of 1,169 MW.

As part of the bankruptcy filing, the 675 MW Somerset Generating Station, we well as the 306 MW Cayuga power plant, both in New York, will be controlled by the company’s bond holders.

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