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Allegheny gets waiver extension

February 02, 2003|by JULIE E. GREENE

As Allegheny Energy Inc. officials continue to negotiate a financing deal to avoid filing for bankruptcy, the utility received its fourth extension on waivers from bank lenders Friday.

For the first time, the extension was for only one week with a new deadline of Feb. 7.

Allegheny spokeswoman Cynthia Shoop wouldn't say whether company officials asked for more than a week or whether the one-week extension was a sign that company officials were close to finalizing a finance deal with a syndicate of banks. Allegheny officials are seeking financing of up to $2 billion.

The waivers are for two Allegheny subsidiaries, Allegheny Energy Supply Co. and Allegheny Generating Co.

Allegheny officials announced on Oct. 8 that those subsidiaries were in technical default of credit agreements after the parent company declined to post additional collateral.

Allegheny Energy's financial situation has been ailing in the aftermath of the Enron collapse, troubles in the energy trading market and a disappointing first quarter due to mild weather, a poor economy and lackluster trading.

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