On July 12, NRG Energy, an independent power producer, announced a plan to restructure the company. The proposal comes from Paul Singer, an activist investor and head fund manager of Elliott Management Corporation, and Charles John Wilder, the executive chairman at Bluescape Energy Partners. Earlier in 2017, the two partnered together to form a combined 9.4 percent stake in NRG, and in February they secured positions on NRG’s board for Wilder and Barry Smitherman, a former Texas Railroad Commissioner. As CNBC’s Tom DiChristopher reported, the plan comes after a four-month review of the company by Wilder and Smitherman:
The result of the review is a plan to raise $2.5 to $4 billion by divesting 50 to 100 percent of its NRG Yield renewable energy business and some of its conventional energy assets, which includes coal and natural gas plants. NRG also aims to remove $13 billion in debt from its balance sheet and generate $855 million in annual free cash flow.
The restructuring plan received a positive response from investors. Within a day, after the plan was announced NRG stock prices rose, with shares rising about 25 percent. Neel Mitra, director of power and utilities at Tudor Pickering Holt, told CNBC that the reason for the strong response was the faith investors have in Wilder.
“They have some very aggressive cost cuts, and the reason as to why people are buying into them is this business review committee was run by John Wilder, who is pretty much regarded as one of the most powerful and successful names in the power industry,” Mitra said.
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