Unsecured noteholders of TES have entered into a backstop commitment with respect to a common equity rights offering of $1.3 billion, with option to upsize the rights offering to $1.65 billion, as part of the previously announced restructuring support agreement ("RSA"). Additionally, unsecured noteholders of TES holding over 71% of the unsecured notes have signed the RSA, satisfying another significant milestone.

HOUSTON, June 3, 2022 /PRNewswire/ -- Talen Energy Corporation ("TEC") today announced that subsidiary Talen Energy Supply ("TES" or "the Company") has achieved two significant milestones outlined within its restructuring support agreement ("RSA"), which was initially announced on May 9.

TES and certain members of an ad hoc group of its unsecured noteholders (the "Backstop Parties") have successfully finalized a backstop commitment letter with respect to a common equity rights offering of $1.3 billion, with the option to upsize the rights offering to as much as $1.65 billion subject to certain adjustments at closing, as outlined within its RSA.

In addition, TES has received signatures on the RSA from the Company's unsecured noteholders holding over 71% of the principal amount of the Company's unsecured notes (the "Consenting Noteholders") satisfying the milestone required under the RSA to obtain support for the RSA from noteholders holding at least 2/3 of the Company's unsecured notes. As part of the RSA, the Consenting Noteholders have agreed to equitize more than $1.4 billion of the unsecured notes upon completion of the restructuring process. 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 TES to eliminate $3.2 billion of debt and maximize value to stakeholders.

"The completion of these two key milestones represents another step forward as we strategically reposition TES for long-term value creation. The Backstop Parties' commitment will help facilitate both balance sheet repair and provide equity capital to drive the long-term success of the Talen-Cumulus platform and our people. These developments will allow us to create a strong capital structure suitable for today's elevated commodity market, position the Company for growth, and continue to build upon the many operational achievements we have made in recent years," said Chief Executive Officer Alejandro "Alex" Hernandez.

Chief Financial Officer John Chesser said, "With leading carbon-free nuclear and baseload generation assets critical to grid resilience, and Cumulus' growing investment in energy transition growth projects, TEC's transformation will create significant opportunities for value creation. We are grateful to the Backstop Parties—who are expected to be the future equity owners of TES—for their partnership, confidence and support as we advance Talen forward."

On May 9, in order to effectuate the consensual restructuring contemplated by the RSA, TES and certain of its subsidiaries voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. Pursuant to the RSA, the Company plans to confirm its plan of reorganization approximately six months following the commencement of its restructuring.

Additional Information

The restructuring cases are pending before the Honorable Marvin Isgur and are jointly administered under Case No. 22-90054. Talen Energy Corporation, Cumulus Growth subsidiaries, LMBE-MC Holdco II LLC and its subsidiaries, and Talen Receivables Funding (TRF) are not part of the filing. For more information, visit https://www.talenenergy.com/maximizing-value-for-our-stakeholders/.

Court documents and other information are available on a website hosted by TES' claims agent, Kroll, at https://cases.ra.kroll.com/talenenergy. TES has also established a call center for questions at 844-721-3899 if calling from within the United States or Canada or 347-292-4080 if calling from outside these areas. Creditor inquiries can also be directed to talenenergyinfo@ra.kroll.com.

TES has retained Weil Gotshal & Manges LLP as its legal advisor, Evercore as its investment banker and Alvarez & Marsal as its financial advisor for its restructuring. The Consenting Noteholders are represented by Kirkland & Ellis LLP and Rothschild & Co US Inc.

About Talen Energy Corporation

Talen Energy Corporation, through its subsidiary, TES, is one of the largest competitive power generation and infrastructure companies in North America. TES owns and/or controls approximately 13,000 Megawatts of generating capacity in wholesale U.S. power markets, principally in the Mid-Atlantic, Texas and Montana.

Through its subsidiary, Cumulus Growth, Talen Energy Corporation is developing a large-scale portfolio of renewable energy, battery storage, and digital infrastructure assets across its expansive footprint. For more information, visit https://www.talenenergy.com/esg-focused-future/.

Media Contact
Taryne Williams
Director Corporate Communications
610-601-0327, Taryne.Williams@talenenergy.com

SOURCE Talen Energy Corp.


SOURCE Talen Energy Corp.