How a Unit Sale Closes, Step by Step

What actually happens, in what order?

Seven stages, and they overlap less than owners expect because each one gates the next. Nobody sends an engineer before the records look credible, nobody signs before the engineer reports, and nobody mobilises a crane before the money is committed. The sequence is rigid; only the dwell time in each stage varies.

What does the inspection actually involve?

A borescope inspection takes one to two days and is done through existing casing ports without disassembly. It covers the combustion section, the hot gas path buckets, the compressor stages and the rotor. It finds base-metal cracking, thermal fatigue, coating loss, tip erosion and blocked cooling holes. Reports are typically back within 24 hours.

The generator gets its own campaign, and the numbers are worth knowing because they decide the deal. Insulation resistance is measured with a megger at 5 kV, and what matters is the polarization index, the ten-minute reading divided by the one-minute reading. Buyers look for 2.0 or better on stator windings and 1.25 or better on rotor windings. The rotor also gets an AC impedance test, voltage raised from zero to 130 volts in ten-volt steps, where a step change in the curve indicates shorted turns and pole balance voltages should sit within 5 per cent of each other.

One practical warning. Windings must be cleaned before testing. A documented case read 17,300 ohms before cleaning and 5,850 megohms after steam cleaning: the same machine, a factor of three hundred thousand apart. A dirty unit can fail a pre-purchase test on a false signal, and an owner who lets that happen has lost the deal to housekeeping.

What does "as-is, where-is" actually commit me to?

It excludes the implied warranties, and only if it is written properly. Under the Uniform Commercial Code, expressions like "as is" or "with all faults" exclude implied warranties, but excluding merchantability specifically requires the word merchantability, and in writing it must be conspicuous. Excluding fitness for a particular purpose must be in writing and conspicuous too.

There is a second provision worth knowing, because it works in the seller's favour. Where a buyer has examined the goods as fully as desired, or has refused to examine them, there is no implied warranty as to defects an examination ought to have revealed. Giving a buyer genuine access is not only good faith, it narrows what they can come back on.

The one thing an as-is clause does not cover is title. A buyer will search for liens, and a filed financing statement stays effective for five years. Blanket bank liens cover every piece of equipment a business owns, and forgotten liens are common on machines that have had several owners. Combined-cycle plants built between 1997 and 2003 are frequently on their third to fifth owner, which is exactly the profile where a stale lien surfaces late. Clear this before marketing, not during diligence.

How do deposits and payment usually work?

Small deposits, fast. There is no published market standard, but the pattern in real contracts is a modest percentage lodged within one business day of signature, with the balance tied to delivery or to milestone certification rather than to signature. The deposit buys exclusivity and proves the buyer is real.

Two dated contracts show the range. A 2009 agreement for used generating equipment priced at $4 million carried a $500,000 deposit, 12.5 per cent, due within one business day, with title and risk passing on the closing date and removal within one month. A 2026 agreement for two Siemens SGT6-5000F packages and an SST6-5000, priced at $350 million, carried a $20 million initial deposit, 5.7 per cent, again within one business day, then staged payments against delivery, with an escrow agent releasing automatically on certification of milestones and title passing when endorsed bills of lading were released from escrow.

Note what the larger contract did with removal: the seller bore disassembly, removal, packaging and loading to the load port, and the buyer took risk of loss at the port. That is the opposite of the usual as-is arrangement and it is negotiable. Who carries removal is one of the two or three terms that actually move price.

Why does the removal window cause so much trouble?

Because it is the only term where the buyer needs something from you after the money is agreed, and because the work behind it has lead times an owner rarely sees. A month is a common contractual window, and overruns attract daily charges. In one agreement the holdover was $200 a day; industrial auction terms treat unremoved lots as abandoned.

The lead times are the real constraint. A heavy-frame removal is an oversize, overweight move: a GE 7EA gas turbine runs about 293,000 pounds and its generator about 333,000 pounds, with a 7FA generator at 540,000 pounds. Route surveys are done at bid stage, before permits are filed, and they verify lane widths, vertical clearances, bridge load ratings, pavement, obstructions needing wire lifts, and traffic windows. Texas asks for superheavy applications three to four weeks ahead unless an approved route is already on file. Police-escorted moves cannot be scheduled next day.

Then there are the site conditions nobody costs until late. Buyer's riggers will be asked to carry a million dollars of general liability naming the seller as an additional insured. At an older plant, demolition or renovation that disturbs regulated asbestos requires a certified inspection and notification to the regulator at least ten working days beforehand. If the unit is leaving the country, export information must be filed before loading, and at some ports breakbulk free time runs to ten or fifteen days before storage charges start.

What actually kills these deals?

Deferred maintenance that the records do not admit to, and access that the seller cannot actually give. Everything else is negotiable. The common failures are documented and repetitive: records that cannot support a factored-hours recomputation, a lien nobody cleared, a service agreement written to an operating profile that no longer applies, and refurbishment scope discovered after the offer.

Two more are worth naming. Destination emissions limits can strand an otherwise good machine: one documented relocation was constrained by a 9 parts per million NOx cap at the receiving site, and the financing required single-point warranties that a bare as-is sale does not provide. And ownership history matters more than owners think, because each prior owner is another chance for records to have been lost and another lien to have been filed.

What is the honest first step?

Clear the title and assemble the records before anyone visits. Those two things determine whether the sequence above runs in sixty days or falls over in the third stage, and both are entirely within your control before a buyer is involved.

Genloop runs this sequence as principal. Our own engineers do the assessment on site rather than sending a report to a committee, which is why the diligence stage is usually the shortest part of our timeline. An owner then chooses between direct acquisition, where title and risk move to us and we carry the removal and everything after it, and a recovery mandate, where we take the unit through restoration and redeployment and the owner captures the spread. Fleets run under a divestment mandate, sequenced unit by unit. Where the situation is court-supervised, we work to the trustee's calendar rather than our own. The asset never goes to the open market.