Calpine sets bid procedures for $124 million sale of unfinished Fremont power plant

By Caroline Salls

Pittsburgh, Nov. 21 - Calpine Corp. requested court approval of the bidding procedures for the proposed $124 million sale of its partially completed power plant in Fremont, Ohio, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

American Municipal Power - Ohio, Inc. is the stalking horse bidder.

According to the motion, the power plant is only 70% complete and would require up to $150 million in additional capital expenditures to finish.

In addition, Calpine said it has not been able to enter into any long-term power purchase agreements in connection with the plant, so "the future economic viability of the Fremont project is highly speculative."

American Municipal Power will pay a $6.2 million deposit upon Calpine's approval of the purchase notice and another $6.2 million deposit no later than one business day before the auction.

If American Municipal Power is not the high bidder, Calpine will pay it a $3.1 million break-up fee.

The initial overbid must be for at least $4.1 million more than the stalking horse bid, and subsequent bids must be made in increments of at least $500,000.

A hearing on approval of the bid procedures is scheduled for Dec. 19. The sale hearing will be held on Jan. 30.

Calpine, a San Jose, Calif., power company, filed for bankruptcy on Dec. 20, 2005. Its Chapter 11 case number is 05-60200.

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