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New Mach Gen, LLC Chapter 11 Petition, Prepackaged Plan Filed

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New Mach Gen (“NMG”) and four affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 18-11368. NMG, which is headquartered in The Woodlands, Texas and owns and operates three natural gas-fired electricity generating facilities, is represented by Robert S. Brady of Young Conaway Stargatt & Taylor. Further engagements include Evercore as investment banker and Alvarez Marsal as financial adviser.

In a press release announcing the filing of the voluntary prepackaged plan of reorganization and an accompanying restructuring support agreement (“RSA”) entered into with its first lien lender (Beal Bank USA) and equity owner (non-Debtor Mach Gen, LLC), New Mach Gen advised that “the transactions contemplated by the RSA… will reduce NMG’s overall indebtedness, result in the extension of additional credit to NMG from its equity owner, and align NMG’s balance sheet with anticipated future financial performance.” New Mach Gen’s Chief Financial Officer John Chesser further noted, “The Company’s existing balance sheet assumed higher capacity payments and higher margins from our three assets, but poorer-than-expected results delivered lower cash flows, impeding our ability to service debt. The Company and its advisors have worked closely with its first lien lender to consensually restructure its credit facility. We’re pleased to announce that we’ve reached a mutually-agreeable plan to restructure our balance sheet, providing for a continued path forward as markets recover.”

New Mach Gen’s petition notes between one and 50 creditors (the largest unsecured creditor being Siemens Energy, Inc. with a claim of $5.3 million); estimated assets between $500 million and $1 billion; and estimated liabilities between $500 million and $1 billion. New Mach Gen was formed in 2014 to own and operate the four affiliated Debtors (with which it is currently filing for Chapter 11 protection) as they emerged from an earlier Chapter 11 proceeding. A hearing on the Debtors’ first day motions has been scheduled for June 12, 2018 and the case has been assigned to the Honorable Mary F. Walrath.

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