Mirant debtor requests court OK of bid procedures for $17.2 million power facility sale

By Caroline Salls

Pittsburgh, Sept. 15 - Mirant Corp. debtor Mint Farm Generation LLC requested court approval of the bidding procedures and its choice of Longview Generation LLC as stalking horse bidder in the proposed $17.2 million sale of its Longview, Wash., power facility, according to a Wednesday filing with the U.S. Bankruptcy Court for the Northern District of Texas.

The construction of the facility has been suspended since August 2002, the filing said.

The construction contractor continues to maintain the facility under the existing construction contract, for which it employs three full-time employees and, when necessary, outside contractors. Mirant also has one contract employee working four days per week performing administrative services.

The total budget to maintain the facility in its present condition, including property taxes, is about $2 million per year.

According to the motion, the company determined that it would not realize economic benefits from the facility because it was not dedicating resources to support trading in the market, it did not own additional assets in the market and it did not desire to expand there.

The depressed energy market in the Northwest and the fact that the incremental cost to construct, own, maintain and operate the facility exceeded the risk adjusted present value of the cash flows that would be generated by the facility also factored in the decision to sell.

Longview Generation has paid a $1.72 million deposit. Other bidders would be required to pay the deposit as well.

If Longview Generation is not the high bidder, Mint Farm will be required to pay it a $516,000 break-up fee and $250,000 in expense reimbursements.

The initial overbid must be for at least $18.22 million, which includes the break-up fee, expense reimbursement and an additional $250,000.

Each successive bid must be for at least $250,000 more than the previous bid.

If necessary, the auction will be held Oct. 17, with a sale hearing scheduled for Oct. 19.

Mirant, an Atlanta-based power company, filed for bankruptcy on July 14, 2003. Its Chapter 11 case number is 03-46590.

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