Jay Worenklein, ceo at US Power, declined to comment on the transaction, as did officials at Lehman Brothers, which is acting as advisor to the Citigroup/ Société Générale-led creditor group. Calls to officials at Cargill were not immediately returned.
Ownership of Lake Road was transferred from previous owner National Energy & Gas Transmission to a Citigroup-led creditors group last September after a loan default. Worenklein put in a $220 million bid to acquire the facility from its creditors. The deal would have worked out to US Power paying $42 million in cash and assuming about $180 million of debt. The creditors still hold a claim against NEGT that will enable them to get $239 million separate from any plant sale. Under this deal creditors will recover approximately 80% of the bank debt.
But the debt on the plant, which was quoted around 50 last July, has climbed above this level. Bear Stearns reportedly traded a $25 million piece of the credit at 82 last week (LMW, 12/20).