Southaven Power $300 million executory contract sale bid procedures approved

By Caroline Salls

Pittsburgh, Jan. 17 - Southaven Power, LLC obtained court approval of the bid procedures for the proposed $300 million sale of its pre-bankruptcy executory contracts, according to a Wednesday filing with the U.S. Bankruptcy Court for the Western District of North Carolina.

Kelson Energy III LLC is the stalking horse bidder.

As previously reported, the Tennessee Valley Authority was the original stalking horse bidder when the company filed its bid procedures motion in December. However, Wednesday's order said the bid procedures were changed at the hearing held Jan. 9.

Tennessee Valley Authority's $260 million offer has been classified a qualified bid for the assets, so the authority will be able to participate in the auction.

Southaven will also pay the Tennessee Valley Authority a $2.5 million fee if it is not the high bidder.

Kelson will pay a $30 million deposit.

Bids are due March 19, and all bids must include a 10% deposit of the proposed purchase price.

Competing bids must be for at least $1 million more than the stalking horse bid, plus a $5 million termination fee.

Subsequent bids at auction must be for at least $1 million more than the previous bid.

The auction will be held on March 31. The sale hearing is set for April 2.

Southaven Power is an energy and transportation company based in Southaven, Miss. It filed for bankruptcy on May 20, 2005. Its Chapter 11 case number is 05-32141.

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