Talen Energy Supply ("TES") and Consenting Noteholders Upsize Equity Rights Offering Backstop Commitment to $1.55 Billion, with Option to Upsize the Rights Offering to $1.9 Billion

Parties Amend Restructuring Support Agreement, Confirmation Expected in December 2022; TES to Commence Go-Shop Process Following Approval of Backstop Commitment

HOUSTON, Aug. 10, 2022 /PRNewswire/ -- Talen Energy Supply, LLC ("TES" or the "Company") announced today that it has reached an agreement with an ad hoc group of its unsecured noteholders holding over 80% of the principal amount of the Company's unsecured notes (the "Consenting Noteholders") on amendments to its existing restructuring support agreement ("RSA") and backstop commitment letter ("BCL"). The amendments provide for an additional $250 million of equity capital commitments and other provisions that will advance TES' transformative recapitalization process.

On May 9, 2022, TES entered into an RSA with the Consenting Noteholders and subsequently on May 31, 2022, TES entered into a BCL that provided for, among other things, the infusion of up to $1.65 billion of new equity capital pursuant to a common equity rights offering (the "Rights Offering"), $1.3 billion of which was backstopped by certain of the Consenting Noteholders (the "Backstop Parties"). Today's RSA and BCL amendments increase the upper limit of the Rights Offering to up to $1.9 billion, which includes an increase in the Backstop Parties' committed backstop of the Rights Offering from $1.3 billion to $1.55 billion.

In addition, the amended RSA permits TES to conduct a process to solicit and consider proposals for sale alternatives. The sale process (the "Go-Shop") will be led by Evercore, TES' financial advisor, during which time TES will solicit bids for the sale of the Company. As of the date of this press release, the Company's Restructuring Committee of the Board has received an unsolicited proposal to purchase 100% of TES in an all-cash transaction. The Go-Shop process will commence following approval of the amended BCL by the U.S. Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). A hearing on the amended BCL is currently scheduled for August 29, 2022.

"The upsizing of the Company's Rights Offering to up to $1.9 billion allows TES to continue advancing our recapitalization with incremental equity, strategically repositioning TES for long-term value creation as an energy transition and digital infrastructure platform," said Chief Executive Officer Alejandro "Alex" Hernandez. "TES remains committed to maximizing value for all stakeholders through the restructuring, including the Go-Shop process, while defining a future for our people and the communities we serve," continued Mr. Hernandez. 

Chief Financial Officer John Chesser added, "We appreciate the willingness of the Consenting Noteholders and Backstop Parties to upsize their equity investment in TES and provide the Company with the opportunity to explore additional value-maximizing opportunities. The amendments to the RSA and BCL enable TES to continue making meaningful progress towards completion of our strategic recapitalization by the end of the year. Together with Evercore, we will also conduct a sale process for TES and its attractive asset base in parallel."

Additional Information

On May 9, 2022, TES and certain of its affiliates filed for chapter 11 protection in the Bankruptcy Court. The cases are pending before the Honorable Marvin Isgur and are jointly administered under Case No. 22-90054. Talen Energy Corporation ("TEC"), Cumulus Growth subsidiaries, LMBE-MC Holdco II LLC and its subsidiaries, and Talen Receivables Funding (TRF) are not part of the filing.

Court documents and other information are available on a website hosted by TES's 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.

About Talen Energy Supply

TES, a subsidiary of TEC, 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. 

TES and its affiliate, Cumulus Growth (a TEC subsidiary), are developing a large-scale portfolio of renewable energy, battery storage, and digital infrastructure assets across TES's expansive footprint.  For more information visit, https://www.talenenergy.com/esg-efforts/.

Media Contact 
Taryne Williams 
Director Corporate Communications 

Evercore – Financial Advisor Contacts

William Hiltz

Jonathon Kaufman

SOURCE Talen Energy Supply, LLC