Ranhill not paying $228m
Thursday, August 03, 2006
KUALA LUMPUR —Malaysian power firm and biggest engineering firm Ranhill Bhd does not plan to make a $227.5 million down payment for the Masinloc power plant in Zambales, Philippines and is prepared for the asset to be reauctioned, a source close to the matter said yesterday.
“At this point, it’s not justified to make the payment as there is no contract for the sale of electricity to Meralco,” the source said, referring to a supply contract with Manila Electric Co.
But Ranhill might make a fresh bid for the plant if the government put it up for auction again, the source added.
Ranhill declined to comment.
The government had earlier confiscated a $14 million bond of Ranhill-controlled YNN Pacific Consortium Inc. after it failed to meet a June 30 deadline for the down payment.
But the government said in early July the intended buyer of the plant still had a month to pay the down payment after the termination of the contract by July 10.
YNN successfully bid $561.7 million for the Masinloc plant in December 2004. It would be the first major power plant sold by the Philippine government as part of a plan to raise $4 billion to $5 billion by selling state-run power assets.
Ranhill, meanwhile, can put in a bid on its own if Masinloc is open to a second round of tender, an official of Private Sector Assets and Liabilities Management Corp. said.
“While we have not issued any official pronouncement on whether or not Ranhill can participate in the rebidding, we do not see any legal barrier that could prevent their participation,” the PSALM official to Malaysia’s Business Times. “However, PSALM has yet to set the schedule for rebidding.”
PSALM also announced yesterday that it would no longer accept the upfront payment of Ranhill and partner YNN Pacific after the sale contract officially lapsed on Aug. 6.
PSALM president Nieves Osorio said the agency would accommodate YNN and accept the $227.4 million payment to enable the government to complete the sale of the Masinloc power facility.
“Our relationship with YNN will cease upon the effectivity of the termination notice on Aug. 6,” Osorio said.
“This means that even if YNN requests that it be given more leeway—which it has not—PSALM is no longer in a position to entertain such petition. Besides, there is no indication at the moment that YNN can come up with the upfront payment,” she said.
Osorio said the 30-day notice of termination for the sale contract would expire on Aug. 6. YNN-Ranhill was served a notice of termination on July 7.
Osorio said the 30-day period was not an extension but a procedure stipulated in the Asset Purchase Agreement.
“The 30-day stretch serves as a winding down period. It is not an extension,” she said.
Reuters, Alena Mae S. Flores
posted by philpower @ 1:00 PM,
