Entegra Power gets pre-packaged reorganization plan confirmed by court

By Kali Hays

New York, Sept. 19 – Entegra Power Group LLC obtained confirmation of its pre-packaged plan of reorganization and approval of the related disclosure statement by a Friday order from the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Entegra said it entered into a restructuring support agreement in June with holders of pre-bankruptcy second-lien claims, pre-bankruptcy third-lien claims and Entegra equity interests.

The financial restructuring is designed to cut the company’s total outstanding debt to $788 million on the plan effective date from $1.5 billion as of May 31.

Terms under the approved restructuring include the following:

• Holders of pre-bankruptcy second-lien claims will receive their share of new second-lien series A notes, the total principal amount of which will be equal to the $231 million principal amount outstanding under the pre-bankruptcy second-lien credit agreement, plus accrued and unwaived interest, minus the amount of new second-lien series B notes, as well as cash received from the proceeds of the series B second-lien notes;

• Holders of pre-bankruptcy third-lien claims will receive their share of 100% of senior equity interests and $550 million in principal amount of new third-lien debt;

• Existing equity interests in the parent company will be canceled, and holders will receive their share of series B equity interests, provided, however, that holders of parent equity interests who vote to accept the plan may elect to waive their right to receive their share of the interests;

• Eligible holders of pre-bankruptcy third-lien claims will be permitted to purchase new second-lien notes in the form of new second-lien series B notes;

• General unsecured claims will either be reinstated or paid in full;

• Intercompany claims will either be reinstated in full or in part or canceled; and

• Equity interests of debtor subsidiaries, except Basso-TP 2 Inc.., will be reinstated. The Basso-TP 2 interests will be canceled.

The second-lien notes will mature in three years. Interest will be Libor plus 900 basis points, payable in kind or through an increase in the principal amount.

The $550 million new third-lien credit agreement will mature in six years from closing. Interest will be 9¼%.

Entegra is a Tampa, Fla., owner and operator of power plants. The Chapter 11 case number is 14-11859.

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