When Al "Chainsaw" Dunlap became CEO of Scott Paper Co, a company owned by large, vertically integrated production in Mobile, Alabama. Dunlap sold some production areas, CHP capacity (later known as Mobile Energy Services Co), the Southern Co. for $ 350 million. This case is set in August 1995, when the mobile Energy Services company is trying to launch two bonds worth $ 340 million to refinance the acquisition bridge loan. Potential investors should consider the risks of bond related to "inside the fence" power complex. In particular, they should consider how the transition from the vertically integrated in the vertical division of the object will affect the creditworthiness of the power plant and whether the contractual agreements that bind the parties and control operations will be as effective as a single property. Because of the vertical separation, the ability Mobile Service energy service its debt obligations depends on the long term viability of the treaty power it has with windmills. "Hide
by Benjamin C. Esty, Aldo Sesia Source: Harvard Business School 18 pages. Publication Date: February 19, 2003. Prod. #: 203061-PDF-ENG
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