By Myrna M. Velasco
Published: August 19, 2013
The issuance of the certificate of effectivity (COE) for the transaction closing of the privatized 218-megawatt Angat hydropower facility has been deferred anew to September 2, 2013 from the earlier agreed date of August 23, hence, raising questions if winning bidder Korea Water Resources Corporation (K-Water) is still trying to delay the process.
In a related development, it was hinted by sources privy to the negotiations that San Miguel Corporation “is seriously considering bringing in a third party” into the joint venture (JV) deal it has been closing with K-Water.
The proposed third party, which will also be a Filipino firm, will corner 20-percent equity; while SMC has its interest fixed for now on 40-percent shareholdings in the special purpose company (SPC) that will be set up for the Angat plant acquisition. K-Water will hold on to the remaining 40 percent, as part also of its compliance to the Constitutional limitations on ownership of entities involved in exploitation of natural resources.
“Initially, the parties agreed that SMC will take charge of the 60-percent equity, including the share of its third party partner. But negotiations are still ongoing, so there might still be changes to it,” the source said.
The parties are also hammering out the operation and maintenance (O&M) component of the JV deal, as SMC reportedly raised reservations after uncovering the level of residual debts that has yet to be settled for the Angat asset and the extent of rehabilitation that the plant needs to raise its generating efficiency.
The memorandum of agreement (MOA) is still being finalized, although parties have so far scheduled the signing tentatively on August 28. Under the initial deal reached by the parties, it was disclosed that San Miguel will be paying for its equity portion in the deal plus a premium.
Meanwhile, government sources bared that there was no letter-request sent by K-Water yet on the COE issuance, but asset-seller Power Sector Assets and Liabilities Management Corporation (PSALM) has the option to act on it unilaterally.
In a text message, PSALM president Emmanuel R. Ledesma Jr. said “we have been in talks with K-Water regarding the details of the deliverables. The COE will be issued in two weeks’ time.”
As of July 15 meeting between parties, Energy Secretary Carlos Jericho Petilla laid down that PSALM will be given 30 days from then to serve the COE notice to winning bidder K-Water, leading to the transaction’s closing.
But in a meeting last Thursday (August 15), K-Water reportedly requested for a deferment of the COE issuance because it needs to finalize first its partnership deal with San Miguel.
The board of directors of K-Water reportedly gave final nod on the Angat acquisition during their August 6 meeting; and it was similarly communicated to PSALM that they will pay the full amount of $440.88 million.
The K-Water board, it was gathered further, set “no conditions” on the transaction closing. Even the proposed cost-sharing arrangement with the Metropolitan Waterworks and Sewerage System (MWSS) on Angat’s auxiliary units 4 and 5 was not touched as a closing issue.
The Angat plant was privatized as early as 2010, but a major legal hurdle prevented its early turnover to the winning bidder. source
In a related development, it was hinted by sources privy to the negotiations that San Miguel Corporation “is seriously considering bringing in a third party” into the joint venture (JV) deal it has been closing with K-Water.
The proposed third party, which will also be a Filipino firm, will corner 20-percent equity; while SMC has its interest fixed for now on 40-percent shareholdings in the special purpose company (SPC) that will be set up for the Angat plant acquisition. K-Water will hold on to the remaining 40 percent, as part also of its compliance to the Constitutional limitations on ownership of entities involved in exploitation of natural resources.
“Initially, the parties agreed that SMC will take charge of the 60-percent equity, including the share of its third party partner. But negotiations are still ongoing, so there might still be changes to it,” the source said.
The parties are also hammering out the operation and maintenance (O&M) component of the JV deal, as SMC reportedly raised reservations after uncovering the level of residual debts that has yet to be settled for the Angat asset and the extent of rehabilitation that the plant needs to raise its generating efficiency.
The memorandum of agreement (MOA) is still being finalized, although parties have so far scheduled the signing tentatively on August 28. Under the initial deal reached by the parties, it was disclosed that San Miguel will be paying for its equity portion in the deal plus a premium.
Meanwhile, government sources bared that there was no letter-request sent by K-Water yet on the COE issuance, but asset-seller Power Sector Assets and Liabilities Management Corporation (PSALM) has the option to act on it unilaterally.
In a text message, PSALM president Emmanuel R. Ledesma Jr. said “we have been in talks with K-Water regarding the details of the deliverables. The COE will be issued in two weeks’ time.”
As of July 15 meeting between parties, Energy Secretary Carlos Jericho Petilla laid down that PSALM will be given 30 days from then to serve the COE notice to winning bidder K-Water, leading to the transaction’s closing.
But in a meeting last Thursday (August 15), K-Water reportedly requested for a deferment of the COE issuance because it needs to finalize first its partnership deal with San Miguel.
The board of directors of K-Water reportedly gave final nod on the Angat acquisition during their August 6 meeting; and it was similarly communicated to PSALM that they will pay the full amount of $440.88 million.
The K-Water board, it was gathered further, set “no conditions” on the transaction closing. Even the proposed cost-sharing arrangement with the Metropolitan Waterworks and Sewerage System (MWSS) on Angat’s auxiliary units 4 and 5 was not touched as a closing issue.
The Angat plant was privatized as early as 2010, but a major legal hurdle prevented its early turnover to the winning bidder. source
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