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Power News
01 November 2002
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NEG walks away from GenHoldings
PG&E's National Energy Group has walked away from its
investment in the GenHoldings I portfolio and has effectively
handed over the assets to its lenders. The move is the first time
in recent memory that a sponsor has resorted to such drastic
action, and has not pursued a strategic sale. As such it
demonstrates the central attraction of non-recourse structures to
sponsors ? that such a burden can be abandoned ? and opens up the
possibility of further similar actions by distressed corporates.The
GenHoldings portfolio consists of the Millennium project, a 360MW
plant located in Massachusetts that is operating, a 1080MW plant
located in Athens, New York, the 1092MW Harquahala facility in
Arizona, and a 1170MW Covert, Michigan plant. Harquahala was
originally a synthetic lease candidate, and Covert was only to be
included if the GenHoldings portfolio raised enough in syndication.
The Citi- and SG-led financing raised $1.46 billion towards a $1.7
billion target. The difference of $240 million was...
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