Mirant selling RP assets
Thursday, July 13, 2006
By Alena Mae S. Flores
Mirant Corp., which recently dropped an unsolicited bid to buy rival NRG Energy Inc., yesterday said it planned to sell its international assets and buy back up to $1.25 billion of its stock.
The independent American power generator said it is starting auctions to sell its Philippine and Caribbean businesses and expects the transactions to close by mid-2007.
Mirant had previously said only that it planned to recapitalize its business in the Philippines. It had expected to raise around $1.2 billion in refinancing for its core Philippine assets, a source close to the plan told Reuters in March.
Mirant hired Credit Suisse as financial advisor for the sale of the Philippines business, which includes ownership interests in three generating facilities. JPMorgan will serve as advisor for the sale of the Caribbean unit, which includes controlling stakes in utilities in Jamaica and Grand Bahama and minority investments in two others.
The remaining Mirant businesses will consist of the US operations, which the company expects to generate enough cash to meet all of capital requirements and planned environmental capital expenditures.
The sale of Mirant assets in the Philippines, including interests in three generating power plants, namely Sual, Pagbilao and Ilijan, meanwhile, has drawn interest from nine companies, an industry source said.
Included in the sale of Philippine operations are three generating facilities with a combined power capacity of 2,203 megawatts. The Philippine business contributed $370 million in adjusted earnings before interest, taxes, depreciation and appreciation in 2005, the company said.
The nine interested companies are AIG, One Energy, Mitsubishi, China Light and Power Holdings, Korea Electric Power Corp., Tokyo Electric Power Co., Kyushu Electric Co., Ayala Group, Aboitiz Group and First Pacific Corp./Metro Pacific Corp. led by businessman Manuel Pangilinan.
Energy Secretary Raphael Lotilla said Mirant’s move “was not entirely unexpected” given the financial condition of Mirant Philippines’ mother company in the US after emerging from a bankruptcy protection in January.
He said Mirant’s plants remained profitable. “Higher expected economic growth supported by rising foreign direct investments demonstrates that investor confidence remains intact and will help sustain the profitability of these plants,” the energy chief said.
“In light of its decision to sell its Philippines business, Mirant has adjusted its plan to recapitalize the business. The recapitalization will now consist of a $700 million term loan for which Mirant has obtained a commitment from Credit Suisse. The term loan will be prepayable at par,” the company said.
posted by philpower @ 3:34 PM,
