Optim Energy LLC was approved by its bankruptcy court on Aug. 7 to complete the sale of its coal-fired Twin Oaks power plant in Texas to the winner of an Aug. 4 auction, Major Oak Power LLC, which made an offer of $126m.
Twin Oaks is a two-unit, 305-MW, lignite-fired plant located in Robertson County, Texas. When it sought Chapter 11 protection in February at the U.S. Bankruptcy Court for the District of Delaware, Optim Energy said that Twin Oaks and a burdensome lignite supply contract for the plant were major sources of its financial problems.
Major Oak Power is an affiliate of Blackstone Group LP that was in the early, pre-auction bidding for the plant.
Twin Oaks Power LLC was the second highest auction bidder in the auction at $121.5m. Twin Oaks Power is an affiliate of energy investor ArcLight Capital Partners LLC.
An Aug. 7 hearing was held before Judge Brendan Shannon to review the auction results, with the judge approving the sale that same day. The judge in the written order said that Optim has shown “sound business judgment” in working out this sale agreement and that there would be continuing financial losses for the bankruptcy company if this plant wasn’t sold. The judge said this sale does not constitute a “sub rosa” Chapter 11 reorganization plan.
Optim has two gas-fired power plants still in hand that it has identified as key assets and it will continue with its Chapter 11 reorganization process from here.
The Aug. 5 sale agreement, which is attached to the judge’s order, is signed by Sean Klimczak as President of Major Oak Power. His contact information is: Major Oak Power LLC c/o The Blackstone Group LP, 345 Park Avenue, New York, NY 10154, Telephone: (212) 583-5701, Email: firstname.lastname@example.org.