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Plans to revive debt-laden company Alinta Energy (ASX:AEJ) and create a single entity are reportedly being worked through.

The Australian newspaper reports TPG Opportunities Partners has joined forces with other lenders to draft a plan to restructure Alinta formerly known as Babcock and Brown Power.

The newspaper said the plan would however rest on the company's ongoing asset sale process failing to deliver value above the current debt burden of $2.6 billion in senior loans.

The proposal which is believed to involve a debt-for-equity swap is understood to be in its very early stages, and parties involved in the process reportedly include BHP Billiton and Origin Energy.

TPG Opportunities Partners is a major holder of Alinta's debt after acquiring shares in the secondary market.

Alinta Energy has been in the red for the past three years and in 2009 posted a $167 million loss.