Ad Hoc Group of Bondholders in GEMSA Restructuring

Cleary Gottlieb represented an ad hoc group of holders of the 11% senior secured notes due 2031 issued by Generación Mediterránea S.A. (GEMSA) and Central Térmica Roca S.A. (CTR) in connection with a comprehensive restructuring process of GEMSA’s group debt.

The ad hoc group was comprised of a diverse group of market-leading financial institutions.

The restructuring followed a number of defaults by GEMSA on its existing debt beginning in April 2025, affecting total outstanding indebtedness in excess of $1 billion—including the 2031 notes held by the ad hoc group—triggered in part by chronic delays and shortfalls in payments from Argentina’s wholesale electricity market administrator (CAMMESA).

The ad hoc group was actively involved at every stage of the restructuring, from the enforcement of collateral (calibrated to allow the GEMSA group to continue its operations), through the negotiation of commercial terms of the comprehensive restructuring, to final implementation.

The ad hoc group entered into a restructuring support agreement with GEMSA on March 20, 2026. The exchange offer was launched on May 4, 2026. Consummation of the exchange offer was conditioned on participation by holders representing at least 85% of the aggregate principal amount of the outstanding 2031 notes—the supermajority required to release the collateral securing the notes. On June 2, 2026, GEMSA and CTR announced the successful closing of the exchange offer, with holders representing 97.88% of all outstanding 2031 notes—approximately $346.5 million in aggregate principal amount—having validly tendered their notes. Participation comfortably exceeded both the 85% minimum condition and the 90% threshold entitling the issuers to exercise a clean-up call, paving the way for a comprehensive restructuring of the entire series of 2031 notes. Settlement of the exchange offer occurred on June 5, 2026.

In a notable feature, the exchange offer documents incorporated a fallback mechanism providing that, if the exchange offer failed to achieve sufficient participation, the existing indenture would be amended to change the governing law to the laws of England and Wales, enabling the pursuit of a UK scheme of arrangement with respect to the 2031 notes. This backstop—designed to ensure a comprehensive restructuring regardless of the exchange offer outcome—was ultimately not required, as the exchange offer achieved the requisite level of participation.

The terms of the restructuring contemplated the exchange of the outstanding 2031 notes (together with accrued and unpaid interest) for new senior secured notes due 2034, together with the issuance of additional VRI notes due 2036, a significantly enhanced security package including an active trust structure, ongoing liquidity monitoring, and a tightening of covenants. As to the new instruments issued in exchange for the 2031 notes, the new notes bear interest at 7.5% through June 30, 2028, 8% through June 30, 2030, and 9% thereafter, payable semi-annually in cash, amortizing in 17 installments starting on December 31, 2026, with a final maturity of December 31, 2034. The VRI notes will bear interest at 10.5% through December 31, 2034, and at 4% thereafter, with a final maturity of June 30, 2036. The new notes and VRI notes will be equally and ratably secured by collateral including fiduciary assignments of receivables under GEMSA’s power purchase agreements, pledges over key generation equipment, and a pledge over GEMSA’s equity interest in CTR.

In parallel with the exchange offer, GEMSA is pursuing a restructuring of its outstanding unsecured indebtedness by means of an acuerdo preventivo extrajudicial (APE) under Argentine law. The terms of the unsecured restructuring were negotiated in coordination with the ad hoc group. The APE process is designed to achieve a comprehensive resolution of the GEMSA group’s remaining financial liabilities on terms consistent with the restructuring of the 2031 notes.

GEMSA and CTR rank among Argentina’s largest private electricity generators, with a combined installed generation capacity of 1,858 MW across 10 thermoelectric power plants spanning multiple Argentine provinces, complemented by a power plant in Talara, Peru, operated under a 20-year management agreement with Petroperú. The issuers derive their revenues primarily under long-term power purchase agreements with CAMMESA.

The Cleary team included partners Rich Cooper and Polina Lyadnova and associates Rodrigo López Lapeña and Lucas Davidenco. Partner Bill McRae and associate Jack Samuel advised on tax matters.