THE hunt is now on to find new operators for debt-laden Drax Power Station, after its American owner walked away.

As predicted by the Evening Press on Tuesday, AES Corporation has withdrawn from the site after banks and bondholders, who are owed £1.3 billion, refused to accept its financial restructuring offer.

Four AES Corporation executives, including station manager Garry Levesley, have resigned, and left independent directors in charge on behalf of lenders.

Gordon Horsfield, a former operations director with Pricewaterhouse-Coopers, has been appointed director and chairman of AES Drax Holdings.

Gerald Wingrove, former finance director with London Electricity, has been appointed group finance director.

Mr Horsfield said today he was in talks with a number of firms interested in taking over the UK's largest coal-fired power plant. International Power (IP) has already declared an interest, offering 55p for every £1 of the money owed in exchange for 15 per cent of the debt and up to 36 per cent of Drax's equity.

IP chiefs, who already run coal-fired stations, have also made an offer to manage the plant for an undisclosed fee.

German-owned Innogy, which sold Drax to AES as National Power in 1999 for £1.87 billion, has expressed an interest.

A spokesman said: "We are interested in all aspects of Drax, not just running the plant. We used to own it, so we have the expertise."

Mr Horsfield said: "We are in discussions with a number of parties. We are looking for a straightforward, uncomplicated offer, which fits with the restructuring (rescheduling of debt) plan.

He said they were still considering International Power's offer, but in the meantime the plant would continue to operate normally.

He said the directors had assurances from the senior creditors' committee that a standstill agreement, preventing creditors taking action that could damage other lenders, would be extended to the end of September.

Mr Horsfield said: "We are working with the creditors to translate their support into a formal restructuring plan.

"I have been greatly encouraged by what I have found out about the plant and the people who work here."

Selby MP John Grogan said today: "I have spoken to the new directors and been assured that the plant will not go into administration.

"They also told me that all contracts will be honoured, including the contract with UK Coal, so there should be no reason for the Selby pit complex to close earlier than planned."

Updated: 14:21 Thursday, August 07, 2003