Mitsubishi pondering buying Mirant RP asset
Monday, August 21, 2006
HONG KONG
- CLP Holdings Ltd. and Mitsubishi Corp. are interested in buying Mirant Corp.'s Philippine power unit through a new venture, CLP's top executive said on Monday, eyeing assets worth an estimated $3 billion.
Hong Kong's top electricity utility and Mitsubishi Corp., Japan's largest trading firm, formed OneEnergy Ltd. as an exclusive vehicle to develop power generation businesses in Southeast Asia and Taiwan in March.
"We have expressed interests under OneEnergy," Andrew Brandler, CLP's managing director and chief executive, told Reuters at the company's headquarters.
They are "potentially good assets".
We are "waiting to assess it, operating assets with good cash flow", he added.
U.S. electricity producer Mirant is selling its ownership interest in three generating facilities in the Philippines -- in Sual, Pagbilao and Ilijan -- totalling 2,203 MW of capacity.
Banking sources have told Reuters those assets were estimated to carry an enterprise value of nearly $3 billion.
Mirant has sent out a short sale document on the assets to potential bidders, including some Japanese firms and financial investors.
The U.S. company is expected to conduct the auction in two stages, asking interested parties to submit indicative bids by the end of August, with binding bids due by the end of this year, one source said earlier.
Brandler, a former investment banker, also said CLP planned to inject its 40 percent of Taiwan's Ho Ping power plant into OneEnergy, while partner Mitsubishi intended to inject its 21 percent of Philippines' Ilijan plant. Both were still in talks but hoped to complete asset injections this year, he added.
Going public was not high on the agenda to finance OneEnergy's expansion plans.
"We haven't discussed that. It's not inconceivable at some future date. It's well down the path," he said.
Outside the Philippines, OneEnergy, which holds a 22.4 percent stake in Electricity Generating Public Company Ltd. (EGCO) in Thailand -- which was formerly owned by CLP -- it aims to expand in Indonesia, Vietnam, Thailand and Taiwan, he said.
"The growth is huge. All those markets are keen to attract capital," Brandler said.
Despite the strong growth potential in these markets, Brandler acknowledged that each country had its own challenges and different credit ratings.
Thailand had investment grade while Indonesia and the Philippines were below investment grade, he said, adding that one advantage in having Mitsubishi was to share any risks.
Shares in CLP, a member of the blue-chip Hang Seng Index ended the morning session down 1.5 percent at HK$47.35, compared with a 1.9 percent drop in the benchmark index. Reuters
posted by philpower @ 9:48 PM,
