Blackstone Unit $126 Million Bid Wins Optim Twin Oak AuctionMichael Bathon
A Blackstone Group LP unit won a bankruptcy auction with a $126 million offer for a coal-fired Texas plant being sold by Optim Energy LLC, the power producer controlled by billionaire Bill Gates’s investment firm.
Major Oak Power LLC, an investment vehicle created by Blackstone to make the acquisition, beat a unit of ArcLight Capital Partners LLC, which bid $121.5 million at yesterday’s auction, according to court papers filed today in U.S. Bankruptcy Court in Wilmington, Delaware.
The Blackstone unit more than doubled its first offer of about $60 million for Optim’s 305-megawatt Twin Oaks plant, according to court filings. ArcLight’s affiliate replaced Major Oak as the lead bidder for the plant with a bid of about $82 million.
The Optim plant received interest from fellow bankrupt power provider Energy Future Holdings Corp. Optim is indirectly owned by Cascade Investment LLC, an investment vehicle for Gates, co-founder of Microsoft Corp. according to court filings.
Optim sought bankruptcy protection in February, after Cascade stopped funding its losses, which piled up as electricity prices declined along with natural gas. Cascade is owed about $713 million for having paid off an Optim loan from Wells Fargo Bank NA.
Optim owns or partially owns two other plants, both running on natural gas, that together can generate 1150-megawatts, according to court filings.
The case is Optim Energy LLC, 14-bk-10262, U.S. Bankruptcy Court, District of Delaware (Wilmington).