As part of NRG Energy’s restructuring, the company recently announced its new transformation plan on July 12, under which it could sell off 50 percent to all of its renewable energy generation systems, which include some of the largest solar power plants in the US. The company, under new management, is seeking to raise up to $4 billion in revenue from selling off both conventional and renewable energy assets and reduce its debt by $13 billion to appease investors.
The company, which owns some of the largest solar farms in the US, like the 250 megawatt California Valley Solar Ranch, has 45 gigawatts of electric generation across the US. The new transformation plan could see it sell off 6 gigawatts of conventional energy, its NRG Yield business, which owns 2.7 GWs of renewables including the California Valley Solar Ranch Project and more.
“The transformation plan announced today demonstrates our commitment to simplify and strengthen the company to thrive through any market cycle. This plan is the result of a comprehensive review of our entire business by the board and management to simplify our business, right-size our portfolio and strengthen our balance sheet to create significant value for all our stakeholders,” said Mauricio Gutierrez, President and CEO.
It’s a stark departure from the company’s leadership under former CEO David Crane and even Gutierrez’ early leadership. Under Crane the company aggressively expanded into renewable energy, including residential solar and energy efficiency. During Gutierrez’ early tenure, he purchased a large portfolio of renewable energy assets, including 1.5 GWs of SunEdison's solar farms, observed GTM Research.
The plan was unanimously recommended by NRG’s business review committee (BRC). It also received unanimous approval by NRG’s board of directors and company management, the company stated.
“The BRC, composed of five experienced and skillful directors and supported by two exceptionally qualified independent advisors, worked continuously for four months on a comprehensive review of NRG’s operations and cost structure to dramatically improve NRG’s financial performance and competitiveness,” said John Wilder, chair of the BRC. “We developed an extremely detailed transformation plan that was unanimously approved by the BRC and the board.”
“By establishing the BRC, the board kick-started an exhaustive four-month review where nothing was sacred. The board and management scrutinized and challenged every available opportunity that could create value for our shareholders—and embraced the plan being announced today. The board unanimously and enthusiastically supports this transformational plan,” said Larry Coben, chairman of NRG board.Tweet