Two bidders are reportedly vying to acquire the 3 GW Exelon Boston generation portfolio, which was put on the auction block by bank creditors. The identities of the bidders could not be determined, but bankers familiar with the deal say both bids are in the $1.1 billion range, which would cover the debt load attached to the fleet. Any sale is contingent upon lender approval and it is unclear when a winner will be selected.
The Exelon debt is being quoted at 107-108, up from the high 70s early last year. At those levels the offers place the value of the plant at about $398 per kW.
The bulk of the plants' debt is now owned by a handful of hedge funds, including New York-based Longacre Management. A Longacre official, would not provide any details.
An observer following the deal speculated that Houston-based Tractebel North America would be a logical candidate because Tractebel subsidiary Distrigas of Massachusetts LLC owns an LNG terminal that provides gas to two of the plants, Mystic River 8 and 9. Calls to Julie Vitek, spokesperson at Tractebel, were not returned.
In July, a BNP Paribas-led bank group hired Lazard Freres to lead the sale. Calls to a spokeswoman at BNP and George Bilicic, a managing director with Lazard's global energy and power group, were not returned. The Boston area plants were developed and owned by Exelon Corp. which decided to hand back the keys last year.
In addition to Mystic 8 and 9, the plants include Fore River, all 832 MW gas-fired plants, along with Mystic 7, a 560 MW oil and gas-fired plant. A Lehman Brothers-led auction of the Exelon Boston plants faltered in 2003, largely because potential acquirers were deterred by their heavy debt burden (PFR, 11/25/03).
