Mach Gen LLC, the owner of three natural-gas fired power plants, will cut debt by about $1 billion as it exits bankruptcy after winning court approval of a prepackaged restructuring plan in just over a month.
Second-lien lenders will gain control of the company. The plan was “overwhelmingly supported” by creditors and owners, allowing Mach Gen to get through bankruptcy in about 40 days, company lawyer Michael E. Comerford said at a hearing today in Wilmington, Delaware, that lasted about 10 minutes.
“I don’t know if you’ve beaten the record” for the quickest plan-approval hearing, U.S. Bankruptcy Judge Mary Walrath told Comerford. “But you’ve come close.”
Mach Gen sought bankruptcy protection March 3 listing assets of about $750 million and debt of about $1.6 billion. Under an agreement reached before the filing, second-lien lenders will swap about $1 billion in debt for 93.5 percent of the reorganized company’s equity. Current shareholders will get the remaining 6.5 percent of the equity.
Lenders owed about $483.2 million in first-lien term loans will get new term loans of about the same amount, according to court papers. A $200 million bankruptcy loan that was used to pay first-lien revolving debt of about $119.4 million will be converted into an exit loan to help fund operations after bankruptcy. Unsecured creditors will be paid in full.
The Athens, New York-based company owns generators in its hometown, as well as Maricopa County, Arizona, and Charlton, Massachusetts, that can produce about 2,532 megawatts of power. Mach Gen had about $350 million in operating revenue last year, resulting in a net loss of about $120 million.
The case is In re Mach Gen LLC, 14-bk-10461, U.S. Bankruptcy Court, District of Delaware (Wilmington).