FirstEnergy Generation looks to complete $152 million facility sale

By Caroline Salls

Pittsburgh, Nov. 20 – FirstEnergy Generation, LLC announced Tuesday that it has agreed to sell its West Lorain facility and related assets to Starwood Energy Group Global, LLC affiliate Vermillion Power, LLC for $144 million in cash.

FirstEnergy said in a bid procedures motion filed with the U.S. Bankruptcy Court for the Northern District of Ohio, the total consideration expected to be realized from the sale is roughly $152 million.

According to a news release, the facility is a periodic-start, combustion-turbine generation station located in Lorain, Ohio.

FirstEnergy said the sale will be completed under a bankruptcy court-supervised auction process.

In addition to higher and better bids and approval by the bankruptcy court, the sale is subject to the receipt of customary approvals, including approval of the Federal Energy Regulatory Commission and Hart-Scott-Rodino.

Under the proposed sale procedures, competing bids are due by 5 p.m. ET on Jan. 9.

If Vermillion Power is not ultimately the winning bidder, FirstEnergy will pay a termination fee equal to 2.5% of the initial purchase price and reimburse up to 1% of its sale-related expenses.

Competing bids must provide for a cash purchase price equal to or greater than the sum of $151.7 million, the amount of the termination fee and expense reimbursement and a $1 million overbid amount.

An auction will be held on Jan. 15, if necessary. Bids at auction must be made in minimum increments of $1 million.

If approved, the companies expect to close the transaction in the first half of 2019.

A hearing on approval of the bid procedures is scheduled for Dec. 18.

Akin Gump Strauss Hauer & Feld LLP is serving as legal counsel and Lazard is serving as investment banker to FirstEnergy Solutions Corp. in connection with this sale and during FirstEnergy Solutions’ Chapter 11 restructuring. King & Spalding LLP is serving as legal counsel to Starwood.

FirstEnergy Solutions is an Akron, Ohio, provider of energy and services to retail and wholesale customers. The company filed for bankruptcy on March 31, 2018 under Chapter 11 case number 18-50757.

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