United States

Heritage Power, LLC Enters into Restructuring Support Agreement With its Parent Company, GenOn, and Lenders to Carry Out a Balance Sheet Restructuring

Commences expedited reorganization process to right-size capital structure in light of energy margin impact and decreased capacity prices

No impact to plant employees or day-to-day business operations

Company intends to shed burdensome contracts to pave way forward

HOUSTON, Jan. 24, 2023 (GLOBE NEWSWIRE) —  Heritage Power, LLC and certain subsidiaries and affiliates (collectively, “Heritage”) today announced that they have commenced voluntary Chapter 11 cases under the United States Bankruptcy Code. Heritage has ample cash on its balance sheet and will continue to operate its business in the normal course without material disruption to its vendors, partners or employees. There is no need for additional financing at this time.

As part of the announcement, Heritage has entered into a restructuring support agreement (the “RSA”) with GenOn Holdings (“GenOn”) and Consenting Lenders (collectively, the “Lenders”). The proposed financial restructuring would significantly reduce Heritage’s debt and establish a more sustainable capital structure pursuant to a consensual chapter 11 plan (the “Plan”) that GenOn and the Lenders have agreed to support. A component of the restructuring contemplates resolution of burdensome and unfavorable agreements to further solidify the financial position of Heritage into the future.

GenOn and GenOn entities other than Heritage are not filing for bankruptcy protection and will continue to operate in the normal course.

David Freysinger, Heritage’s President, stated, “The material downturn in capacity prices in the PJM market, energy margin impacts, coupled with increases in costs created uncertainty for Heritage’s viability with the current capital structure. Heritage, GenOn and the Lenders recognized the best chance for success was to proactively restructure Heritage’s debt and contracts. I am pleased that all parties were able to reach this agreement.”

The Plan will provide for, among other things: (1) significant de-leveraging of Heritage’s capital structure by equitizing secured claims against Heritage; (2) rejection of burdensome contracts; and (3) retention of current plant employees serving the Heritage fleet. The Plan will be finalized upon a confirmation hearing by the Court and reaching certain milestones to be set forth in the reorganization and related transaction documents.

Freysinger further noted, “Our number one focus has been, and continues to be operating safely while serving the PJM marketplace and its customers with the Heritage plants. With rapid changes in capacity prices and anticipated on-going disruptions, we needed to address these capital structure changes now. The terms of the RSA create the strongest path for Heritage’s future success.”

Haynes and Boone, LLP is acting as legal advisor, and Alvarez & Marsal is acting as restructuring advisor to Heritage.

For inquiries regarding the restructuring, please call 888-296-8501 or go to https://dm.epiq11.com/HeritagePower.

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