Global Infrastructure Partners (GIP) has acquired a bankrupt cogeneration plant in Texas for $500 million (€317 million). The deal is a joint venture with energy company Fortistar.
The Channelview power generation facility, located 20 miles east of downtown Houston, was approved for sale by a Delaware court last month after filing for Chapter 11 bankruptcy protection. Its parent company, Reliant Energy, previously said in a statement that the sale proceeds would be used to settle claims from creditors, including $379 million of debt.
The 830-megawatt, natural gas-fired plant has been fully operational since 2002 and sells steam and a portion of its electric output under long-term contracts with Equistar Chemicals, a wholly-owned subsidiary of LyondellBasell, one of the world’s largest polymers, petrochemicals and fuel companies.
Speaking last month, GIP managing partner Adebayo Ogunlesi said the Channelview plant was one of the “cleanest and most efficient steam and electric power producers in Texas.” New York-based GIP was unavailable for further comment.
Reliant Energy had agreed to sell the plant to power producer Kelson Energy earlier this year for $468 million. However, that deal was terminated following a court-ordered auction, which GIP and Fortistar won.
GIP is the infrastructure joint venture between Credit Suisse, GE Infrastructure and AIG Financial Products, a subsidiary of AIG. GIP recently closed its flagship first fund on $5.64 billion.
The fund has already made several investments, including a high-profile acquisition of London City Airport in December 2006. The airport, which is located in the Royal Docks close to Canary Wharf and the City of London, predominantly serves business travelers travelling to 31 destinations within the UK and across Europe.
The fund has also invested in port assets in the UK and Argentina, and in a liquid petroleum product storage facility in India. GIP recently completed the acquisition of a stake alongside buyout firm Montagu Private Equity in Biffa, a British waste management infrastructure business.