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America's two publicly traded wind companies, Kenetech Corp and New World Power Corp, have been forced to obtain extensions on financial payments, an unusual step that underscores the financial problems currently plaguing both of them.

Kenetech announced it would not pay the mid February dividend for its convertible preferred and publicly traded stock, known as its 8.25% PRIDES, or preferred redeemable increased dividend equity securities. The company had been expected to face a liquidity crisis this quarter, according to Standard and Poor's, a financial house, when it lowered Kenetech's debt rating in early December. Kenetech has apparently been trying to sell its non-wind assets, in particular, to raise cash to meet financial obligations, according to a report by Reuters news agency in late January. It had been unclear previously what assets the company might consider selling first.

News that Kenetech was deferring its February dividend was released together with a report that the financial rating of Energy Investors Funding Corp (EIF) had been lowered by Moody's Investors Service, partly because of the fund's links to Kenetech. Moody's had also lowered the rating of Kenetech's debt late last year.

The EIF bonds were down-graded because of the fund's exposure to the deteriorating credit of Kenetech and the utility Niagara Mohawk Power Corp, also involved in the struggling US wind business. EIF, a partnership based in Delaware, was founded in 1988 to make investments in independent power facilities. The stock of the troubled firm dipped below $1 briefly in the third week of February. It once traded at a high of $29.50.

About a week later, New World Power Corp announced that all holders of its 8% convertible subordinated notes, due July 31, 2000, had agreed to allow New World to extend their semi-annual interest payment from February 15 to February 28. The payment on the $15.7 million in notes, issued in a private placement last year, had already been extended from February 1. New World says it is considering various options with its debt holders, including selling assets and restructuring.

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