Mirant told to first settle obligations with RP gov’t prior to sale
Monday, August 14, 2006
By MYRNA M. VELASCO
US firm Mirant Corporation was told by Philippine energy officials that before finalizing transaction with the buyer of its assets here, it should first settle its obligations with the government, including the P1.35-billion worth of claims lodged by National Power Corporation.
Mirant Corporation executive vice president and general counsel S. Linn Williams and Mirant Philippines chairman and president Jose P. Leviste made a call on Energy Secretary Raphael P.M. Lotilla last week to update him on the sale plan of their generation plants in the country.
"There are very well qualified international companies that have expressed interest in bidding for our business," Williams, who once served as deputy US trade representative under former president George HW Bush, has apprised Lotilla. In the roster of prospective Mirant buyers are in fact among the world’s deeppocketed energy companies and investment firms.
During the visit, the Mirant officials committed anew to the energy chief that they shall continue to fulfill the committed electrification of 500 barangays; but the manner on how this can be carried out in consideration of their sale of assets, is still under review. The energization of at least 175 of these barangays are already undergoing implementation.
As to the other obligations of Mirant on the Philippine government, it was learned that the US company indicated of settling them so the new owners would be able to start on a clean slate.
The NPC claims was in reference to overpayments made in the power sharing and delivery agreements it had entered with Mirant for the 200-MW excess capacity of the Sual power station.
While Sual’s installed capacity is 1,200 MW, the contracted volume is just 1,000 MW; thus, they opted to sell the surplus capacity to other large-ticket end-users, like industries and other locators in economic zones.
The company also needs to take into consideration next steps on a pending case relating to the settlement of real property taxes (RPT) for both its Sual and Pagbilao plants; with the amount already hitting over P4.0 billion.
Prior to its exit, the US firm is also hounded by concerns raised on how it will tackle separation packages for its employees; and most especially for its top executives who are most vulnerable of getting discharged once the new owners would take over.
The other issue that Mirant has been in discussion with government, through the Philippine National Oil Company (PNOC), was the substation that shall serve the electricity needs of the planned revival of operations of the Bataan Polyethylene Corporation.
When the new management of Mirant first met with the energy officials in May, they have told government that they will be here for the long haul and that they will just pursue refinancing of their Philippine operations.
They told the energy secretary then that contrary to speculations "Mirant is committed and continue to value their assets here and they remain committed to implement all their commitments made in the past - such as rural electrification," stressing further that despite the refinancing, it "does not have plans of exiting the Philippine power market."
Just barely two months though, in July, the company made announcement in its Atlanta headquarters of the sale of its Philippine assets and this is now eyed for completion before the end of the year or until early next year.
The company plans to fetch proceeds of $ 2.4 billion to $ 2.8 billion from the sale; and a shortlist of 4 to 5 likely buyers will be out next month. (MMV)
posted by philpower @ 10:22 AM,
