San Francisco-based private equity firm Energy Investors Funds Group has recapitalized Crockett Cogeneration, a natural gas-fired cogeneration plant in California, through the issuance of $295 million (€224 million) in 20-year bonds. The proceeds from the bonds are being used to refinance the plant’s existing $200 million bank debt and make a cash distribution to the equity partners.
“The closing of the refinancing is great news for Crockett and the investors in our funds”, said John Buehler, a managing partner at Energy Investors.
Mark Segel, the partner at Energy Investors who led the recapitalization, said in a statement that the long-term agreement with Pacific Gas and Electric Company, as well as the plant’s steady cash flow, were viewed favorably by the markets.
The 240-megawatt plant, located near San Francisco, is the largest facility selling power to the Pacific Gas. The plant’s agreement to sell power to Pacific Gas expires in 2026, a year after the bonds mature.
It also sells steam to the C&H Sugar Company refinery, located near the plant.
The plant was purchased by Energy Investors’ US Power Fund for a reported $72 million in November 2002.
Energy Investors Funds Group was founded in 1987 and has over $1 billion invested in the energy sector with five funds. The US Power Fund closed in 2003 on $250 million and targets investments in generation, transmission and energy service assets.