Talen Energy Supply LLC received court permission Wednesday to begin soliciting creditor votes on a bankruptcy restructuring plan that would convert $1.4 billion in debt to equity and raise up to $1.9 billion through sale of new equity shares, Reuters reported. Bankruptcy Judge Marvin Isgur in Houston said that he would approve the company's disclosure statement, which describes the reorganization plan, after revisions were made that will keep the door open for potential overbids from outside buyers. Creditors will then vote to approve the plan. Talen's restructuring is supported by a group of its existing unsecured bondholders, including funds managed by Nuveen Asset Management LLC, Rubric Capital Management LP and Citadel. Those bondholders agreed to convert $1.4 billion in existing debt to new equity shares and agreed to backstop at least $1.55 billion of a planned $1.9 billion equity offering, according to the disclosure statement. Talen, which filed for chapter 11 protection in May, owns 16 energy generation facilities in the U.S., with a mix of nuclear, natural gas, oil and coal-powered facilities.
