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$NRG General Update: NRG Energy today announced recipients of fifth annual Howard E. Cosgrove Academic Scholarship. Scholarship provides four winners up to $60,000 each in pursuit of four-year undergraduate degree. Winners were determined based on outstanding academic achievements & activities outside the classroom as children of NRG employees.
$NRG announced the final results of its tender offer to buy any and all of its outstanding 6.625% senior notes due 2023. The tender offer expired on Dec. 28, 2017. An aggregate of $797.206MM of the 2023 notes were validly tendered on or prior to expiration date.
Electricity company $NRG said it will commence an offering of $870MM aggregate principal amount of its senior notes due 2028. The company plans to use the proceeds from the offering to repurchase about $869MM aggregate principal amount of its 6.625% senior notes due 2023.
$NRG announced its transformation plan. This includes $1.065Bil recurring cost and margin improvements, $2.5-$4.0Bil targeted asset sale net cash proceeds, and removal of $13Bil total debt from balance sheet. The Business Review Committee unanimously recommended the Plan and it received the unanimous approval by $NRG BoD and management.
$NRG had milder weather during 1Q17 and wholesale prices were higher QoQ. This naturally compresses gross margin. The company has good momentum in customer growth and retention. Retail remains strong. Although there was some compression due to weather and customer mix, $NRG believes it is strong and can maintain margins.
$NRG said that it incurred non-cash impairment charges of $1.2Bil in 2016. The company had impaired a number of assets during 2016 for a total of approx. $300MM through 3Q. Given the prolonged low commodity price outlook, $NRG adjusted its long-term view of power prices, which resulted in additional non-cash impairment charge of about $900MM.
$NRG has entered into cooperation agreement with affiliates of each of Elliott Management Corporation and Bluescape Energy Partners LLC. Pursuant to this, Howard Cosgrove and Edward R. Muller has announced their retirement from the $NRG BoD. The company has named Lawrence Coben, as Chairman of Board.
$NRG said it will reprice its $1.9Bil Term Loan B due June 2023. The transaction is leverage neutral and enhances free cash flow before growth via annual cash interest savings. $NRG expects interest savings over the remaining life of the loan to total about $60MM. Expected interest savings in 2017 are projected to be about $9MM.