Energy Renaissance: Mainstream reorganizes its Chilean assets

In July 2023, Mainstream Renewable Power initiated judicial reorganization proceedings for Condor Energía SpA and Huemul Energía SpA. Indeed, these key subsidiaries are part of the Andes Renovables platform, which represents a combined portfolio of 1.4GW of wind and solar projects.

Stabilization of Wind and Solar Projects

The aim was to restructure the company’s assets and capital structure, renegotiate its financial debts and inject new capital. In addition, the favorable outcome of these proceedings ensures a solid financial footing for the Condor (591MW) and Huemul (630MW) wind and solar projects.

Restructuring of Senior and Mezzanine Debt

A key element of the agreement concerns senior debt, with interest deferred until the third quarter of 2026 and principal payments until 2027 for Condor and 2029 for Huemul. Mainstream is also committed to injecting $145 million into Energía companies in the form of PIK debt, which will be senior to mezzanine debt but junior to project finance debt. Around $150 million from the closing of interest rate swaps will be available for debt repayment at project level and the provision of liquidity.

Renewed support from lenders and shareholders

The negotiations also enabled funds managed by Ares Management affiliates, the mezzanine lenders, to take a minority stake in Andes Renovables, while allowing Mainstream to retain the majority stake. The restructuring was welcomed by Mainstream CEO Mary Quaney, who emphasized the lenders’ support and confidence in the long-term sustainability of Energía’s businesses.
The injection of new capital into the Energía businesses will be facilitated by a new guarantee and liquidity facility of up to $220 million from DNB, with the support of Mainstream shareholders. This facility will be used for a variety of purposes, including to meet Mainstream’s commitments in connection with the restructuring in Chile, reflecting shareholders’ ongoing support for Mainstream and its reorganization.

The restructuring of Mainstream Renewable Power marks a significant milestone in Chile’s renewable energy sector. With a stabilized financial base and renewed support from its creditors and shareholders, Mainstream is positioned to continue its leadership role in the energy transition, addressing market distortions for a level playing field in power generation.