Talen Energy announces CEO departure, secures regulatory approvals

By Sarah Lizee

Olympia, Wash., April 5 – Talen Energy Corp.’s chief executive officer, Alejandro “Alex” Hernandez, announced that he will depart from his role as CEO when Talen completes the restructuring under its Chapter 11 plan of reorganization, according to a press release issued Wednesday.

Additionally, Talen announced that it has received regulatory approvals for the transactions contemplated by the plan from the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission.

As previously reported, the plan includes the infusion of new equity capital through a common equity rights offering of up to $1.55 billion, backstopped by various financial institutions that hold about $1.1 billion of Talen Energy Supply LLC’s existing unsecured notes and will, in total, hold the substantial majority of the equity of Talen Energy.

The plan aims to cut down Talen’s debt by $3 billion, provide for full repayment of Talen Energy Supply’s first-lien funded debt, and equitize of all of Talen Energy Supply’s existing unsecured notes.

Hernandez will be succeeded as CEO by Mark “Mac” McFarland on the closing of the transactions, which is expected to occur in the second quarter of 2023 and is conditioned on the company's receipt of remaining regulatory approvals, successful completion of the equity rights offering, backstop funding and debt financing transactions, and the satisfaction of closing conditions under the plan.

Hernandez served as CEO since 2021, president and director of the company since 2019, and previously as chief financial officer from 2016 through 2021.

McFarland is currently the president and CEO of California Resources Corp.

Stephen Schaefer will be appointed as the chairman of the reconstituted board of directors of the company, replacing Ralph Alexander, who has served in this capacity since 2019. In addition to Schaefer and McFarland, following Talen's emergence, the following individuals will be appointed to the company's reconstituted board of directors: Gizman Abbas, Anthony Horton, Karen Hyde and Joseph Nigro.

Houston-based Talen Energy Supply is one of the largest competitive power generation and infrastructure companies in North America. The company filed bankruptcy on May 9, 2022 under Chapter 11 case number 22-90054.

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