TXU Corp. said Thursday it has suspended efforts to get permits to build eight coal-fired plants in Texas, a condition of the electric utility’s proposed $32 billion sale to private buyers.

TXU said it filed a motion to end proceedings for seven plants that were being challenged in hearings before a state agency. The company said it also dropped plans for an eighth plant that wasn’t part of the case.

The suspension of proceedings before the State Office of Administrative Hearings would last six months. TXU said it would formally withdraw applications for air permits needed to build the plants when the company’s sale to private investors is completed.

On Monday, Dallas-based TXU announced that its board had approved a sale to a group of investors led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group in what would be the largest leveraged buyout ever.

To win support for their bid, the investors pledged to cut rates for many customers and scuttle eight of 11 coal-fired plants that TXU had wanted to build. TXU is the largest electric generator in Texas and serves 2.2 million customers, mostly in north Texas.

The private buyers and TXU still want to build three other coal-fired plants that had generated the most intense opposition. Environmental groups are split over whether to fight the other three proposed plants.

Meanwhile, published reports suggested that other buyers are interested in TXU, which is free to entice other offers until April 16.

The Financial Times reported that The Blackstone Group, The Carlyle Group and Hellman & Friedman LLC were talking about making bids. The Wall Street Journal had previously reported that Blackstone was interested.

TXU, Blackstone and Carlyle declined official comment. Hellman & Friedman did not immediately return calls.

TXU adviser Credit Suisse dismissed as misleading a report that suggested it was preparing to finance a rival bid. The Financial Times said Credit Suisse would organize a debt package for other bidders.

Credit Suisse spokeswoman Karen Laureano-Rikardsen said the bank was offering to perform a standard service to clients in a takeover situation by offering so-called staple financing. Under this increasingly common practice, banks working for the seller offer financing when buyers need loans — which they usually do in leveraged buyouts.

When companies have a chance to solicit other bids, as TXU does under the terms of its agreement with KKR and Texas Pacific, “your lead bank says no matter what kind of deal structure comes up, we’re here to help,” Laureano-Rikardsen said. “We’re not undermining the deal we just worked on.”

Credit Suisse would not offer any better terms to new bidders than it provided to KKR and Texas Pacific, Laureano-Rikardsen said.

New bidders would have to decide whether to match rate and environmental concessions that KKR and Texas Pacific made to gain support for their offer.

With those gestures, the initial response to the sale of the state’s biggest electricity provider was mostly positive. The proposed coal plants were strongly opposed by environmentalists and city leaders in Dallas and Houston.

But the KKR-Texas Pacific offer has run into trouble this week in Austin, where lawmakers believe the proposed rate cut is too low considering recent TXU price hikes.

Legislators are also unhappy that state regulators would have little role in reviewing the sale. A state Senate committee voted unanimously for a bill that would require Public Utility Commission approval for a sale.

TXU’s stock jumped 13.2 percent Monday to approach the $69.25 per share that KKR and Texas Pacific offered, but the price slipped back 2.6 percent over the next two days.

On Thursday, the shares rose 31 cents to close at $66.50 on the New York Stock Exchange.

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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