Capstone was initially engaged by the secured Lenders of National Energy Group (“NEG”) the developer and previous owner of the MACH Gen assets.  At the time of our engagement three of the four plants were still under construction.

Following the bankruptcy filing of NEG, ownership of the projects was transferred to the Lenders.  Capstone advised the Lenders on additional funding requirements and the future potential value of the assets.  The projects were ultimately completed, and Capstone advised the Lenders on the transition process.

Following the transition to the Lenders, Capstone continued to advise the Lenders in their new role as equity owners.  In this role, Capstone has provided CEO services to MACH Gen and advised on a refinancing and monetization of one of the assets.  Capstone continues to serve in the role of CEO and advises MACH Gen on both financial and operational matters.

Fiduciary Services:

As senior management, we performed the following services:

• Coordinated the refinancing of approximately $1.6 billion in debt, including the issuance of approximately $780 million of new money
• Executed hedging contracts for approximately 40% of the output of the plants
• Negotiated sale of Michigan asset for sale price in excess of $600 million
• Oversaw periodic reporting to the Lenders and equity holders
• Prepared and delivered presentations to rating agencies in connection with refinancing
• Managed third party providers including asset managers, operation service providers, energy managers/traders
• Served on the Board of Directors (as chairman) and prepared Director level information and reporting
• Coordinated the filing of Federal and State tax returns

Outcome:

Through Capstone’s efforts and involvement in refinancing, and ultimately the management of an asset sale, MACH Gen was able to:

• Complete an asset sale at a level to allow for the retirement of 100% of the first lien term loan.
• Right size the capital structure to an appropriate level.  MACH Gen continues to operate three plants in three states.

The original Lenders were able to receive recoveries near par through sale of their debt on the secondary market.  Subsequent owners have been able to enjoy performing debt and cash from refinancing in addition to proceeds from a major asset sale.