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THE
consortium of Marubeni Corp. and Tokyo Electric and
Power Corp. (Tepco) has expressed to the government its
commitment to expand the 735-megawatt Pagbilao
coal-fired power plant in Quezon, Energy Secretary
Raphael P.M. Lotilla told reporters Tuesday.
The
consortium of Marubeni and Tepco and Mirant Corp.
entered into a purchase and sale agreement, after the
former won the bidding for the sale of the latter’s
Philippine business for a purchase price of $3.424
billion plus working capital at the closing.
“They
[Marubeni and Tepco] have informed and assured President
Arroyo that they will expand the Pagbilao plant by 400
megawatts,” Lotilla said on the sidelines of the Manila
Overseas Press Club and the Economic Journalists
Association of the Philippines’ economic briefing.
Lotilla
added that the consortium is currently focused on
closing the sale transaction with Mirant Corp. and will
focus on its expansion and other projects once the deal
is closed or completed.
The
closing of the deal, according to Lotilla, is contingent
on the completion of the repair works being undertaken
by Mirant on the two units of the 1,218-megawatt Sual
coal-fired power plant in Pangasinan.
Lotilla
said repairs on the Unit 1 and 2 of the Sual are
expected to be completed by May and April this year,
respectively. “Hopefully by June or mid-2007, they can
close the transaction and proceed with their other
projects,” he added.
Upon
completion of the transaction, Lotilla said the
consortium would then concentrate and look at the
expansion of the existing facilities it bought from
Mirant.
Federico
Puno, president of Marubeni Philippines Corp., earlier
told reporters the consortium expects to close deal
within the second quarter or the first half of the year,
particularly when the repair works on the Sual are
completed.
He added
that the consortium was also discussing with the Japan
Bank for International Cooperation to possibly finance
the acquisition of Mirant Philippines Corp.
Declining to comment as to how much they will source
from JBIC, Puno said that everything is still under
discussion between the consortium and the Japan-based
financing agency.
Puno
also revealed that the consortium could also source the
financing from Credit Suisse First Boston (CSFB).
“We
opted not to tap them [CSFB] since the rates they offer
are based on commercial rates. And of course, we want to
maximize the financing packages offered by the JBIC and
a consortium of Japanese banks as much as possible,”
said Puno.
He
revealed that the Marubeni-Tepco consortium is required
to do one-time payment for its $3.4 billion-offer to
acquire Mirant’s assets in the Philippines.
Mirant
Philippines operates the 1,218-megawatt coal-fired power
plant in Sual, Pangasinan; 735-megawatt coal-fired power
plant in Pagbilao, Quezon, and 20-percent stake in
Ilijan, Batangas, natural gas facility.
The
local Marubeni official said the consortium has yet to
set the closing of the transaction, saying that it has
yet to receive the term sheet.
In
December last year, Mirant Corp. announced that it has
entered into a definitive purchase and sale agreement
with a consortium of the consortium of Tepco and
Marubeni Corp. for the sale of its Philippine business
for a purchase price of $3.424 billion plus working
capital at the closing.
After
the payment of related debt estimated to be $642 million
at the closing, the net proceeds to Mirant are expected
to be $3.152 billion.
The
transaction is expected to close in the second quarter
of 2007 after the satisfaction of certain conditions,
including the Sual plant being operational. Mirant’s
financial adviser for the sale is Credit Suisse. |
