Mirant short list expected soon

Atlanta-based Mirant Corp., an independent power producer, will start evaluating the binding bids it received for the sale of Mirant Philippines from at least five consortia, sources privy to the matter said Tuesday. The US-based power producer, through its Singapore-based financial advisor Credit Suisse First Boston, received last Friday binding bids for the sale of Mirant’s Philippine assets. The source said Mirant will evaluate the bids and short-list a group of four consortia by Dec. 15. But another source said it is not automatic that Mirant will award the Philippine assets to the highest bidder. "They want the bidder who not only has a good offer but can raise the offer within three months," said a source familiar with the process. Mirant Corp. announced last July that it was selling its Philippine-based assets including the 1,200-megawatt (MW) Sual coal-plant and the 735-MW Pagbilao coal plant. It also has a 20% stake in the Ilijan gas-fired plant in Batangas. Proceeds of the sale are estimated at $2 billion to $3.5 billion. The sale is part of the power producer’s efforts to shore up its share prices following a recent bankruptcy. Credit Suisse hopes to conclude the sale by yearend. Sources said Asian energy giants participated in the bidding but Mirant officials remain mum on the results of the process. One source said one consortium comprises Korea Electric Power Corp., Japan’s Chubu Electric Power Co. and Sojitz Corp. Another consortium is the group of Japan’s Marubeni Corp. and Tokyo Electric Power Co. while another group consists of Hong Kong-based CLP Holdings Ltd., Mitsubishi Corp. and Malaysia’s Tanjung Bin Power. The source said another group that submitted an offer is composed of US-based AES Corp., Sumitomo Corp. and Kansai Electric Power Co. of Japan. Japan’s Mitsui & Co. has partnered with London-based International Power Plc. for an offer as well, the source said. Mirant was unable to get a bid that reached $3 billion but received an offer higher than $2.8 billion, sources further said. The bidding was carried out despite concerns on the fate of the Filipino employees and the absence of consent from the government on the sale. The 1,200 employees have asked for 2.5 months worth of pay for every year of service and wants Mirant to shoulder the payment. A bidder, however, said his group is willing to honor the company policy and shoulder the costs of the separation pay. A government source, meanwhile, said National Power Corp. (Napocor) has not yet given its consent on the sale. Napocor’s consent is necessary as it is stipulated in contracts between the power firm and indepedent power producers such as Mirant. — Iris Cecilia C. Gonzales/BusinessWorld