Press Release

Kirkland Counsels GenOn on Agreement to Sell Canal Units 1 and 2; Proceeds Expected to be $390.3 Million

Kirkland & Ellis LLP represented GenOn Energy, Inc. on its decision to enter into a purchase and sale agreement with Stonepeak Kestrel Holdings LLC, a subsidiary of Stonepeak Infrastructure Partners, pursuant to which the buyer agreed to purchase all of the right, title and interest in Canal Units 1 and 2, electricity generating facilities with a combined summer capacity rating of approximately 1,112 megawatts. GenOn’s affiliates entered into the purchase agreement with the support of a majority of its noteholders.

Total proceeds are expected to be approximately $390.3 million, inclusive of the expected closing purchase price of $320 million, estimated working capital (including target fuel inventory) of $32.5 million, an anticipated refund of $13.5 million from NRG in respect of the Canal 3 option, and an estimated $24.3 million of post-closing excess fuel inventory payments. The closing purchase price is subject to adjustment for the net working capital of the business calculated as of the closing date (including a downward adjustment for distributions or dividends made after June 30, 2018) and upward adjustment of $13.5 million if the Canal 3 transaction does not close due to a debt financing failure at Canal 3. The full release is available here.

The Kirkland team was led by corporate partners Kim Hicks, Andrew Calder and Shubi Arora and associates Brandon Bishoff and Jenna McCord.