Project: NRG Energy/NRG MidAtlantic Generating
Location: Delaware

Overview:

Prior to the Chapter 11 filing of its parent company, NRG Energy, NRG MidAtlantic Generating, LLC, had defaulted on its loan. The borrower’s assets included 1,100 megawatts (MW) of predominantly coal-fired generation in the Mid-Atlantic region. The entity’s lenders asked E3 to get involved. 

E3 Services Provided:

• Provided business management, technical, and financial advisory services to the secured lenders of NRG MidAtlantic Generating, including:

• Review and approval of the lender’s weekly cash draw requests
• Monthly reconciliation of cash to book income
• Review of the company’s capital expenditure forecasts, and
• Development of valuation model based on independent market assessment

• Reviewed business operations and asset management functions of the lender and its affiliates, including power marketing (collateral requirements, mark-to-market exposure, and bidding strategies), plant operations and corporate overhead allocations

• Developed, as part of a potential restructuring, a framework for a standalone entity, which included:

• Investigating the outsourcing of power marketing and other functions, and
• The development and costing of the business operations infrastructure, including environmental, health, and safety issues

Project Spotlights:

E3’s analysis of the energy markets provided the NRG MidAtlantic creditors with substantive insight into the future cash-generating potential of the business. This, in turn, allowed development of a successful exit strategy based on an immediate par return rather than a negotiation of new loan terms.