Foster Wheeler has reached preliminary agreement with holders of a majority of bonds issued in connection with the Robbins waste-to-energy power plant in Illinois. Under the agreement, the project will be restructured by exchanging existing bonds for new bonds, selling the facility to a new third-party owner/operator, and allowing Foster Wheeler to exit from its operating role.

Specific elements are that Foster Wheeler will:

  • Provide subordinated guarantees on $113 million principal amount of tax-exempt bonds issued by the village of Robbins, in exchange for existing bonds. The new bonds will consist of $95 million of amortizing 25-year bonds, and $18 million of 10-year accretion bonds.

  • Cooperate with the bondholders in seeking to sell the facility to a new third party owner/operator.

  • Pending sale of the facility, operate the facility for up to 2 years with no operational guarantees and full cost reimbursement.

  • Pay in October 1999 approximately $5.4 million of its existing $55 million support obligation.

  • Continue to prosecute the retail rate litigation against various Illinois State officials.

After the transaction is consummated, Foster Wheeler has said that it does not expect to incur any further operating losses from the Robbins facility.