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NRG Energy Inc. reached a preliminary settlement agreement with creditors of GenOn Energy Inc., who would receive 100% equity ownership of the restructured entity and a $243 million cash payment.
Three weeks after signaling that a split from GenOn would yield a positive impact to earnings, NRG, working with an ad hoc committee comprised of creditors to GenOn and GenOn Americas Generation, or GAG, reached a consent agreement that would portend the company's exit from the GenOn entities, according to a May 23 filing.
Under terms of the agreement, which was put into motion last week, the proposed restructuring would allow for NRG's full release from GenOn Energy Inc. and GenOn Americas Generation, as well as indemnification and release from GenOn Mid Atlantic and NRG REMA, LLC claims. The result would give GenOn's bondholders 100% equity in a reorganized entity, with GAG bondholders receiving $920 per every $1000 in principal taken with accrued interest.
Both NRG and creditors to the GenOn entities will seek to finalize a restructuring support agreement, or RSA, by May 26, the filing states, before initiating a formal Chapter 11 process.
NRG has agreed to pay $243 million in a cash settlement should the RSA be supported by holders of more than 50% of the aggregate principal amount...