Talen Energy plans push into crypto, creditors frown

Bloomberg

Talen Energy Corp, a debt-laden power producer operating in the US Northeast and Texas, unveiled a sweeping plan to focus more on clean energy and expand into crypto mining. Its bondholders aren’t sold.
The Woodlands, Texas-based company pitched prospective investors on the strategy, which would require it to raise as much as $800 million in new equity to fund the construction of two new data centres,
including one to mine cryptocurrency, according analysts and investors who watched the presentation.
Talen — which owns a mix of natural gas, coal, nuclear and solar plants — is the latest power company focus harder on renewables as US President Joe Biden pushes to squeeze fossil fuels off power grids. But the company’s move into crypto mining is novel.
To do it, Riverstone Holdings LLC-backed Talen says it needs to recapitalise. Company management emphasized that it’s a good business with an unsuitable capital structure, according to viewers of the presentation, who asked not to be named because the event was private.
Part of that recapitalisation could include creating new corporate entities within the capital structure, according to analysts. Talen’s 6% unsecured notes due 2025 dropped more than 4 cents on the dollar to around 84.25 cents, according to Trace data. Its 10.5% bonds due 2026 bonds last traded at around 91.6 cents, down from about 95.5 the day before the presentation.
The company didn’t immediately respond to a request for comment, while a spokesperson for Riverstone declined to comment.