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Monte Oro wins Transco with $3.95-billion offer


The group of Monte Oro Grid Resources Corp. and State Grid Corp. of China has won the 25-year concession to operate the National Transmission Corp. with a bid of $3.950 billion, the Power Sector Assets and Liabilities Management Corp. said Wednesday. Monte Oro won over lone opponent San Miguel Energy, which offered $3.905 billion for the concession. The firm is backed by mining mogul Walter Brown and businessman Enrique Razon, a known ally of President Gloria Macapagal Arroyo. The two other prequalified bidders, Metro Pacific-backed Two Rivers Pacific Holdings Corp. and Citadel Holdings Inc. did not participate in Wednesday's auction. In a statement faxed to GMANews.TV, Two Rivers said it withdrew from the bidding because its foreign partner, Italian firm Terna Rette Elettrica Nazionale S.p.A. pulled out from the venture. PSALM said the bids by both Monte Oro and San Miguel met the "undisclosed" reserve price set by the asset management group. The latest valuation of TransCo was at $3 billion to $3.5 billion. PSALM said it will officially declare Monte Oro group as the winner 30 days from now after another round of review is made on the submitted documents. After the declaration, the winning bidder will then apply for a franchise in Congress which will take about one year. After Congress grants the franchise, the winning bidder will pay 25 percent of the bid price. The remaining bid amount will be paid within 20 years. However, the group has an option to prepay the government if it deems necessary. Monte Oro will have one month after securing its franchise to takeover the operations of the country's national transmission highway. With the takeover, the Chinese-led consortium will have to pour in some $725 million until 2010 to upgrade and modernize the facilities of TransCo to be able to sustain the uninterrupted supply of power to its customers. Wednesday's auction is the fourth time that Transco's concession was put up for sale. The last time was in February this year when the group of Terna SpA of Italy was the sole bidder. That bidding was declared a failure. But PSALM president Jose Ibazeta believed that they have been very transparent and open in the bidding of TransCo. "We are very happy about the successful turnout of the bidding exercise for Transco. PSALM handled the privatization of the government's transmission business with utmost transparency and judiciousness," Ibazeta said. "We strictly implemented the bidding procedures and complied with the rules governing the selection of today's winning bidder," he added. - GMANews.TV

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