ILAP Reaches Agreement in Principle with Noteholders on Comprehensive Balance Sheet Recapitalization

SANTIAGO, Chile, Sept. 26, 2023 /PRNewswire/ -- Inversiones Latin America Power Limitada ("ILAP" or the "Company") today announced an agreement in principle with noteholders to restructure its balance sheet. This agreement will reduce senior secured debt by approximately $160 million, as well as decrease cash interest expense, both of which will provide the Company with additional liquidity and operating flexibility. Esteban Moraga, CEO of the Company, declared: "We have made significant progress with our noteholders on a potential structure that will allow the Company to reprofile its financial obligations together with ensuring that our noteholders are able to obtain positive returns on their investment.  We have engaged in a constructive discussion with our creditors that we expect will result in a landmark transaction for its creativity and value-adding features.  We deeply appreciate the unwavering support from our stakeholders as we collaboratively work towards a structural solution that will provide the essential liquidity required to navigate the current market challenges facing our projects." 

In connection with these initiatives, ILAP entered into confidentiality agreements (the "Confidentiality Agreements") with certain holders (the "Holders") of the outstanding principal amount of its 5.125% senior secured notes due 2033 (the "Notes") issued pursuant to the Indenture dated as of June 15, 2021 (the "Indenture"). Such Holders represent in aggregate over 80% of the outstanding principal amount of the Notes. Under the Confidentiality Agreements, ILAP provided the Holders with access to certain confidential information, including certain material non-public information (the "Disclosure Materials").

Pursuant to the Confidentiality Agreements, ILAP has agreed to disclose the Disclosure Materials publicly, as well as a preliminary term sheet (the "Term Sheet") outlining an agreement in principle on a potential restructuring transaction with the Holders. The Disclosure Materials and the Term Sheet have been published in ILAP's website under its "investor relations" section (https://latampower.com/web/ilapcl-investors/).

In addition, ILAP and the Holders have agreed to an extension of the standstill and forbearance agreement (the "Agreement") with the Holders until October 6 under the same terms. With this, the Holders have extended the agreement not to exercise any enforcement rights, or otherwise take remedial actions, under the Indenture and related security documents in respect of certain events of default that may arise under the Indenture as a result of ILAP not making certain payments which fell due on July 3, 2023.  

While no definitive agreement has been reached with respect of a potential restructuring transaction, ILAP and the Holders will continue to negotiate in good faith with the

goal of obtaining a fully executed definitive restructuring support agreement and related documents, in terms consistent with those included in the Term Sheet.

ILAP continues to work with Lazard Frères & Co. LLC as financial advisor, Greenberg Traurig, LLP as U.S. legal advisor, and Barros, Silva Varela & Vigil Abogados Limitada as Chilean legal advisors. The Holders have engaged Rothschild & Co as financial advisor, Cleary Gottlieb Steen & Hamilton as U.S. legal advisor, and Claro & Cia. as Chilean legal advisor.

Each of this press release, the Disclosure Materials and the Term Sheet speaks as of the date hereof and each is based upon information available to the Company, its advisors and the advisors of the Holders, and other conditions or circumstances existing as of the date hereof, all of which are subject to change. Nothing contained in each of this press release, the Disclosure Materials and the Term Sheet is, or shall be relied upon as, a promise or representation as to the past, present or future.   This press release, the Disclosure Materials and the Term Sheet, taken each individually or together, do not constitute an offer to buy or the solicitation of an offer to sell the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of any such jurisdiction.

SOURCE Inversiones Latin America Power Limitada (ILAP)