Mirant Corp – ‘8-K’ for 12/19/00

On:  Wednesday, 1/3/01, at 3:03pm ET   ·   For:  12/19/00   ·   Accession #:  1010775-1-500003   ·   File #:  1-16107

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         4     18K 

Document Table of Contents

8-K
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SECURITIES AND EXCHANGE COMMISSION

 Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
 Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 19, 2000
 ---------------------------------------

 Southern Energy, Inc.
(Exact name of registrant as specified in its charter)

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Delaware                 001-16107               58-2056305 
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(State or other jurisdiction   (Commission File   (IRS Employer Identification
of incorporation)                 Number)                  No.)         

1155 Perimeter Center West Suite 100, Atlanta, Georgia 30338
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 (Address of principal executive offices) (Zip Code)

 Registrant's telephone number, including area code (678) 579-5000
 -----------------------------

 N/A
 -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)

8-K
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Item 2. Acquisition or Disposition of Assets.                                   

    On December 19, 2000,  Southern  Energy,  Inc.  (the  Company),  through its
subsidiaries and together with lessors in a leveraged lease transaction,  closed
the asset  purchase  from  Potomac  Electric  Power  Company  (PEPCO) of PEPCO's
generation  assets in Maryland and  Virginia.  The net purchase  price for these
acquisitions was approximately  $2.75 billion which includes working capital and
capital  expenditures  of  approximately  $100  million and  approximately  $1.5
billion provided by a leveraged lease  transaction.  As part of the acquisition,
the Company also assumed net liabilities,  primarily transition power agreements
and obligations under power purchase agreements, of approximately $2.4 billion. 

The acquired assets consist primarily of four generating stations:      

    o   the 1,412 MW coal and oil-fired  Morgantown  station  located in Charles
County, Maryland, approximately 50 miles from Washington, D.C., 

    o   the 2,423 MW coal,  oil and  gas-fired  Chalk Point  station  located in
        Prince  George's   County,   Maryland,   approximately   45  miles  from
        Washington,  D.C.,  including  the  assignment  of  PEPCO's  rights  and
        obligations to the 84 MW Southern  Maryland Electric  Cooperative,  Inc.
combustion turbine located at the Chalk Point station site,     

 o   the 837 MW coal, oil and gas-fired Dickerson station located in upper
Montgomery County,  Maryland,  approximately 30 miles from      
Washington, D.C., and                                           

o   the 482 MW coal-fired Potomac River station located in Alexandria,  
Virginia, in close proximity to Washington, D.C.                

    In  addition  to the  electric  generating  stations  described  above,  the
Company,  through  subsidiaries,  also acquired  three separate coal ash storage
areas, a 51.5 mile oil pipeline serving the Chalk Point and Morgantown stations,
and an engineering and  maintenance  service  facility and related  assets.  The
Company also entered into a lease of the land on which the Potomac River station
is located,  power sales  agreements  with PEPCO under two  separate  transition
power agreements with terms of up to four years, a local area support  agreement
with PEPCO  requiring  the  Potomac  River  station to operate  for  purposes of
supporting a local load pocket, a three-year operation and maintenance agreement
for PEPCO's two generating stations located in the District of Columbia (Benning
and  Buzzard  Point)  and  the  assumption  of five of  PEPCO's  power  purchase
agreements  totaling 735 MW (Ohio Edison,  Panda-Brandywine,  Northeast Maryland
Waste Disposal  Authority,  Prince  George's  County  Detention  Center and Gude
Landfill).  The Company's  rights to acquire the assets were assigned to certain
of the Company's  subsidiaries and the Company executed and delivered to PEPCO a
parent  guarantee to support the obligations of  subsidiaries  under the project
agreements.  In addition,  as part of the acquisition,  approximately  950 PEPCO
employees became employees of a subsidiary of the Company.                      

 The acquired assets are located in the PJM Interconnection  market, which
encompasses all or a part of Pennsylvania,  New Jersey,  Maryland,  Virginia and
the  District  of  Columbia.  The  PJM  Interconnection  market  is the  largest
centrally-dispatched  power pool in the United States.  The PJM  Interconnection
enables  participants  to buy and sell energy and ancillary  services,  schedule
bilateral transactions and reserve transmission service.                        

    The PEPCO assets provide a range of capacity across the PJM  Interconnection
dispatch curve. There is approximately  2,700 MW of baseload capacity,  1,400 MW
of cycling capacity, and 1,055 MW of peaking capacity. Likewise, there is a wide
range of fuels consumed at the facilities,  and  approximately  94% of the total
generating capacity can burn multiple fuels.                                    

    As part of the acquisition, the Company entered into two separate transition
power agreements with PEPCO to provide energy,  capacity and ancillary  services
to PEPCO's default retail  customers.  One of the transition power agreements is
for service to PEPCO's default customers in Maryland and has a term through June
30, 2004. The other transition power agreement is for service to PEPCO's default
customers in the District of Columbia and expires  December 18, 2004. Under both
transition  power  agreements,  the Company is obligated to provide capacity and
ancillary services for the entire term. The Company is also obligated under both
contracts to provide 100% of the energy requirements for the first contract year
and 75% of the energy  requirements  for the second contract year.  Beginning in
the second contract year, PEPCO has the option of purchasing  additional  energy
requirements  in 25% increments up to the level  purchased in the prior contract
year. PEPCO's current peak demand requirements for the existing retail customers
are  approximately  5,300 MW.  With a total  generation  portfolio  of 5,889 MW,
including the power  purchase  agreements,  these  transition  power  agreements
provide a  significant  portion of the  Company's  revenues for the first two to
four years and thereby  mitigate the market price  volatility  risk. The pricing
for these services in each of the agreements is below current market prices.    

    Under the  asset  purchase  and sale  agreement,  the  Company  assumed  the
obligations and benefits of five power purchase agreements with a total capacity
of 735 MW. Three of the power purchase agreements (Ohio Edison, Panda-Brandywine
and Northeast Maryland Waste Disposal Authority) represent 730 MW.              

    In  connection  with  the  acquisition,  the  Company  entered  into  credit
agreements with a syndicate of banks led by Credit Suisse First Boston, New York
Branch, as arranger, and seven other banks that provided the following:         

o       two   facilities   to  SE  North  America   Generating,   the  Company's
        wholly-owned  subsidiary,  totaling  $1.02  billion with  recourse to SE
North America Generating                                        

o       one facility of $650 million to the Company with recourse to the Company

In addition, the Company entered into leveraged lease transactions that provided
$1.5 billion of the  purchase  price at closing.  Equity  funding by third party
owner lessors  provided  approximately  $299  million.  The issuance and sale of
three series of  certificates  pursuant to a 144A offering  raised the remaining
$1.22 billion of lease debt.  Under the leveraged lease financing  arrangements,
the owner lessors acquired the Dickerson and Morgantown  baseload facilities and
leased these  facilities  to a subsidiary  of the Company  under long term lease
agreements.  The leases will be treated as  operating  leases for book  purposes
whereby one of the  Company's  subsidiaries  will record  periodic  lease rental
expenses.                                                                       

8-K
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.     

(a)      Financial Statements of the businesses acquired.                       

N/A                                         

(b)      Pro forma financial information.                                       

                  Pro forma financial information will be provided in an amended
8-K filing on or before March 3, 2001.      

8-K
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 SIGNATURE

                Pursuant to the  requirements of the Securities  Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.                                      

Date:     January 3, 2001                           SOUTHERN ENERGY, INC.       

                                        By /s/ James A. Ward
                                                  ------------------------------
                                 James A. Ward
                                                  Senior Vice President, Finance
                                  And Accounting
                                                (Principal Accounting Officer)

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		12/18/04		2
		6/30/04		2					10-Q
		3/3/01		3
Filed on:		1/3/01		4
For Period End:		12/19/00		1		2			8-K/A
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