Allco Finance Group, facing a June 30 debt deadline, said it will raise A$165 million ($155 million) from the sale of California’s largest wind power project to help reduce borrowings.
Allco led a group of investors that agreed to sell the Tehachapi development for $325 million to ArcLight Capital Partners LLC and Terra-Gen Power, the Sydney-based company said in a statement today.
Shares of Allco surged 86 percent to 54 Australian cents at the close of Sydney trading, their biggest gain in more than two months. The stock’s fallen 95 percent in the past year, wiping more than A$4 billion of market value as Allco struggles to pay loans and directors face margin calls.
Allco’s bankers last month forced the asset manager to triple the yield margin on A$250 million of debt in exchange for a one-month extension on repayment to June 30. Allco has current liabilities of A$935 million and expects to reduce its senior debt to A$675 million by July 31 through the sale of Tehachapi and other assets, it said in today’s statement.
Allco said last month it can’t guarantee its banks, including ABN Amro Holding NV, Commonwealth Bank of Australia and Westpac Banking Corp., will restructure its debt. They’re examining Allco’s plan to sell assets and focus its business on a portfolio of ships, aircraft and railway holdings.
The California Public Utilities Commission on May 15 gave regulatory approval for Edison International, owner of the state’s largest electric utility, to buy power from the project for 10 years.
The schedule for building the 1,500-megawatt wind farm depends upon the construction of a high-voltage power line by Southern California Edison to the Los Angeles suburb of Ontario, Mike Marelli, that utility’s manager of renewable energy, said May 14 in a telephone interview.
By Brett Miller
17 June 2008
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