Korea's Kepco eyeing Mirant's Philippine assets

Korea Electric Power Corp. (Kepco) is considering forming a consortium with two foreign firms for its planned bid for the Philippine assets of Mirant Corp. Kepco Philippines president Gil Gu-Lee told reporters his company may take in Chubu Electric Power Inc. and Suez-Tractebel Power Co. as partners for Mirant. "We are very interested in the Mirant asset. Yes, we are expecting a Japanese and European partner to come in and help in acquiring the assets of Mirant in the Philippines. We plan to finalize the consortium soon or within September," he said. The Kepco official said the consortium intends to buy the entire equity of Mirant Corp. in the Philippines. "We are interested to acquire all of their assets (in the Philippines)," he said. But Lee said they have yet to firm up the equity sharing amongst the members of the supposed consortium. "As to the percentage of the consortium, we have yet to discuss and finalize the details of the partnership," he said. Established in 1951, Chubu EPCo. supplies electricity to the five prefectures of the centrally-located Chubu region of Japan. The supply area covers about 10 percent of Japan as a whole and 16.6 million people. Lee said they see an opportunity for more expansion in Kepco's operation in the Philippine power sector. "We are interested in Mirant since we are continuously expanding our power facilities in the country and we have accumulated our technical know-how in the Philippines. Kepco and Mirant are both good companies in terms of operations and maintenance," Lee added. According to Lee, they would continue to pursue their bid for the Mirant assets despite the negative issues plaguing Mirant. "The issues may be discouraging, but we are still very interested and will definitely participate in the bidding. Our counsels are also assessing the impact of the issues to the valuation of Mirant's assets," he said. Mirant's assets in the Philippines are valued at $2.4 billion to $2.8 billion. Mirant's assets in the country include its interest in three generating power plants, namely Pagbilao, Sual and Ilijan. Its net ownership interest in these three generating facilities to be sold is 2,203 MW. "With or without the consortium, Kepco can still bid for Mirant's assets. The possible partners already have existing businesses in the country," he said. Mirant was subjected to a Congressional inquiry due to alleged non-payment of appropriate taxes to the government. Mirant is also faced with the dilemma of whether it should proceed with the sale of its Philippine assets with or without the consent of Napocor as regards its independent power producer (IPP) contracts. Government wants Mirant Corp., the mother firm of Mirant Philippines, to get the consent of Napocor before selling its assets. - GMANews.TV