Talen Energy Supply gets $1.3 billion equity investment commitment

By Sarah Lizee

Olympia, Wash., June 3 – Talen Energy Supply LLC has finalized a backstop commitment with unsecured noteholders for a $1.3 billion common equity rights offering, according to a press release issued Friday.

The offering, which may be upsized to $1.65 billion, is part of the company’s previously announced restructuring support agreement.

And, holders of over 71% of unsecured notes have signed the RSA, satisfying one of the agreement’s milestones that requires support of holders of at least two-thirds of the unsecured notes.

The consenting noteholders have agreed to equitize more than $1.4 billion of the unsecured notes upon completion of the restructuring agreement.

The $1.3 billion equity backstop, along with debt to be raised and cash available on the balance sheet at the completion of the restructuring process, will enable the company to wipe out $3.2 billion of debt and maximize value to stakeholders, Talen said.

As previously reported, on May 9, the company filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.

Talen Energy Supply said it plans to confirm a Chapter 11 plan of reorganization in about six months.

Houston-based Talen Energy is one of the largest competitive power generation and infrastructure companies in North America. The Chapter 11 case number is 22-90054.

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