Mirant assets’ new owners to work on takeover

REPORT FROM BUSINESSWORLD The consortium of Japanese conglomerate Marubeni Corp. and Tokyo Electric Power Corp. (Tepco) will have to start working on seeking government’s consent before it can take over Mirant Philippines. Marubeni and Tepco bagged the Philippine assets of Atlanta-based Mirant Corp. in a bidding last week after submitting an offer of $3.4 billion. The consortium hopes to take over Mirant in three to four months or after it secures government consent. Energy Secretary Raphael P.M. Lotilla said the government looks forward to working with the winning consortium regarding the consent. "In this particular case, we are going to work together to secure all the requirements," he told reporters during the weekend. A government consent is needed by the new owners of Mirant as it is stipulated in contracts between National Power Corp. (Napocor) and independent power producers like Mirant. Mr. Lotilla assured that the government will do its part in helping the consortium as he expressed optimism that the transaction will close smoothly. "We were able to talk to them so there is a high level of confidence," he said. Mr. Lotilla said the consortium has given its commitment to invest in Mirant’s assets to ensure that it meets the country’s power requirements. In a separate interview on Friday, a Marubeni official told BusinessWorld that the consortium and the present management of Mirant Philippines will work together to secure the consent. "That is what we are going to do. I don’t think there’s going to be any problem," said the official, who declined to be named because he was not authorized to discuss details of the transaction. In a statement announcing the sale, the two Japanese firms said electricity generated from the plants will mainly be sold to Napocor by way of long-term supply contracts. The transaction is expected to close in the second quarter of 2007 after the satisfaction of certain conditions, Mirant has said. The tandem of Marubeni and Tepco beat its major rival, the group of Malaysia’s Tanjong PLC and OneEnergy Ltd. after it raised its offer to $3.4 billion from $2.8 billion previously. US-based electricity producer Mirant Corp. announced last July that it was selling its Philippine and Caribbean assets as part of efforts to shore up its share prices after recently experiencing bankruptcy. Mirant Philippines is the country’s largest electricity producer. It owns the 1,218-megawatt (MW) Sual Power plant and the 735-MW Pagbilao Power Station in Quezon. It also has a stake in the 1,200-MW Ilijan natural gas project in Batangas. — Iris Cecilia C. Gonzales/BusinessWorld