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Show New Utah - Thursday, February 3. 2005 - Page 1 1 Water district makes offer tor Geneva's water rights Grace Leong Utah Valley staff The Central Utah Water Conservancy District in Orem, which administers, sells and delivers water to cities and agencies in 10 counties statewide, has made an offer to buy bankrupt bank-rupt Geneva Steel LLC's water rights in Vineyard. In bankruptcy court documents docu-ments filed Thursday, Geneva Gene-va Steel agreed to sell up to 46,425 acre-feet of water each year to the water district dis-trict for $88.5 million. But that purchase price is effective effec-tive only if Summit Vineyard LLC manager of a $330 million, 534-megawatt natural natu-ral gas-fired Lake Side Power Plant in Vineyard fails to close on its purchase of 6,524 acre-feet of water. Should Summit close on its purchase of the 6,524 acre-feet of water rights, then the water district only has to pay $73.8 million for the remaining water rights, court documents stated. Chris Finlinson, governmental govern-mental affairs director for the water district, said the Central Utah Water Conservancy Conser-vancy District is looking at buying Geneva Steel's water rights because "its service area or the population in the 10-county area including Utah, Salt Lake, Juab, Wasatch, Garfield, Dusch-ene, Dusch-ene, Uinta and Summit counties is growing rapidly." The board of trustees of the water district, at a monthly board meeting Wednesday, adopted a resolution reso-lution authorizing the district dis-trict to make a payment of $10 million in earnest monies as part of its offer to acquire Geneva Steel's remaining water rights, Finlinson Fin-linson said. This offer is contingent con-tingent tipon the approval of the bankruptcy court." J. Thomas Beckett, an attorney representing the unsecured creditors, described the water district's offer as a "great development that will raise the cash necessary nec-essary to pay down, if not pay off the secured creditors. That means the unsecured creditors are next in line to be paid." Geneva Steel's secured creditors are owed about $131 million, and some 450 unsecured creditors are owed between $50 million and $80 million, he said. As of Oct. 31, bankruptcy filings show Geneva's total assets at $81.5 million and its total liabilities at $213.3 million. Geneva Steel, in Thursday's Thurs-day's court documents, described the water district's offer as "an attractive price that will provide any proponent propo-nent of a plan of reorganization reorganiza-tion with a significant amount of liquidity to satisfy a substantial portion, but not all, of the claims of the secured lenders." Richard Ross, Geneva's manager of contracts, said its plans project paying the secured creditors by early summer with proceeds from the sale of the water rights and Geneva Steel's other assets including emission credits, scrap and steel-making equipment That includes a sale of Geneva unit Iron Ore Mines LLC s iron ore properties and interests in Iron County, near Cedar City, to Palladon Ventures Ltd. and Western Utah Copper Co. for $10 million. mil-lion. The acquisition will be funded with secured debt and equity financing. Of the $10 million purchase price, $1.3 million will be a credit at closing for the amount of the reclamation bond obligation obliga-tion to be assumed by Palladon Pal-ladon and Western Utah Copper. And $8.65 million will be paid in cash at the expected close of the deal by April 9. SB OREM 224-82C0 SPANISH FORK 798-1200 Why trust your home to anyone else? Other real estate companies are coming and going! 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