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THE
Philippine National Oil Co.-Energy Development Corp. (PNOC-EDC)
Thursday awarded its remaining shares in its geothermal
arm to Red Vulcan Holdings Corp. after a bidding where
Red Vulcan outbid all others.
The bid
of Red Vulcan, the consortium led by First Gen Corp.,
Netherlands-based Spalmare Holdings B.V. and Prime
Terracota Holdings Corp., was P58.5 billion.
“PNOC
has awarded the controlling stake to Red Vulcan for
offering P58.5 billion, equivalent to P9.75 per share,
or a premium of 55 percent over yesterday’s selling
price of P6.30 per share. This is the kind of premium
that I expected and was looking for,” said PNOC
president Antonio Cailao.
He added
they have sold a block of shares enabling the winning
bidder to gain control of the company. The PNOC-EDC
shares have an attached control premium, and Red Vulcan
has recognized the control premium in these shares. “The
Red Vulcan consortium will gain the majority control of
the operational and financial management of the
company.”
Apart
from Red Vulcan, the other bidders were FDC Geo-Energy
Holdings, Inc. (Filinvest Development Corp. and
International Power Masinloc Holdings Inc.), which bid
P48.528 billion; Aboitiz Power Renewables of Aboitiz
Power Corp., P33.165 billion, and Panasia Energy
Holdings Inc. (San Miguel Energy Corp. and
Beleggingsmaatchappij Broem B.V.), P39 billion.
The
consortium of Alson Consolidated Resources, Inc. and AEI
Investments, Inc. or ACR-AEI Holdings, Inc., opted not
to participate, although it had been prequalified.
Cailao
said, “The commercial value of PNOC-EDC has just been
recently boosted by the structure of the sale.
The
national government is now cashing in on this increased
commercial value while interest in the company is at its
peak. The PNOC-EDC bidding is the most professionally
run, with full 100-percent transparency, and a level
playing field, which can be a model for other energy
organizations to emulate.”
Commenting on statements it was selling off a crown
jewel of the state, Cailao said the PNOC-EDC as a
commercial entity has reached its apex such that its
commercial value today is at its highest inferring it
has nowhere to go but down. He did not mention the
effect of rising oil prices, which had already reached
P100 a barrel for January delivery, a note that senators
have underlined in their objection to the sale. See
related story on the Joint Congressional Power
Commission on front page.
He added
this is the best time to sell because of the interest of
bidders and the supply-demand situation—where there will
be a shortage of electricity in a couple of years.
“Having said that, if the supply is already available by
such time, and we decided to sell it later, the
government may not even get to fetch the same price.”
The
PNOC-EDC is the country’s largest producer of geothermal
energy with an installed capacity of 1,198 megawatts and
is second in the world, topped only by the United
States.
In 2006
the PNOC-EDC accounted for approximately 7.35 percent of
the 15,619 MW installed domestic power-generating
capacity and contributed 11.66 percent of the 56,148
gigawatt-hours total power generated for 2006.
Since
the company began commercial operations in 1983, it has
produced approximately 80,614 gigawatt-hours, or 134
million barrels of fuel oil equivalent, which has
generated total foreign-exchange savings for the
Philippines of approximately $3.75 billion.
The BOT
law became the basis for the establishment of Energy
Conversion Agreements for the Leyte Geothermal Power
Project, and has been instrumental in making the project
not only the world’s single largest geothermal
steamfield but also a showcase for private capital and
government sector partnership.
These
projects involve the optimization of existing
steamfields in Nasulo, Negros Oriental and North
Cotabato, to generate 20 megawatts and 50 megawatts,
respectively, by 2010.
PNOC-EDC
is also exploring new steamfields in Dauin in Negros
Oriental and three sites in Bicol to generate 40-MW from
each between 2011 and 2014. Its biggest prospect is the
Cabalian field in
Southern Leyte, from which 100-MW to 150-MW could be on stream by
2015. |
