Business World Online
Posted on September 17, 2013 12:36:08 AM
By Claire-Ann C. Feliciano, ReporterCONGLOMERATE San Miguel Corp. is set to take over management of Albay Electric Cooperative, Inc. (ALECO), with residents of the province -- hit by a blackout in July after the government cut power over the utility’s debts -- having given their approval.
Energy Secretary Carlos Jericho L. Petilla yesterday said the majority of those who participated in a referendum last Saturday supported the move.
“The referendum pushed through. There were more than 9,000 households who participated. Private sector participation won with more than 5,500 votes,” Mr. Petilla said.
The other option given to Albay residents was the entry of a team from another electric cooperative.
Mr. Petilla acknowledged that the number of referendum participants represented just a fraction of the 208,000 households that ALECO services in the province.
“But it turned out that people who participated favored the entry of San Miguel so the others will have to support that. There was a massive information campaign for the referendum. Everyone was given a chance to vote,” he noted.
ALECO’s board of directors is now expected to meet with San Miguel representatives to issue a notice of award and sign a 25-year concession agreement.
“They will meet this week, on Sept. 18, for the issuance of notice and signing of the agreement. The actual date of takeover will be identified by then,” Mr. Petilla said.
“I want it as soon as possible,” he added.
He reiterated that San Miguel’s entry did not mean that ALECO was being privatized. The conglomerate, via SMC Global Power Holdings Corp. (SMC Power) will just run the cooperative, shoulder its debts and pay monthly concession fees.
SMC Global was the sole bidder in an Aug. 7 auction for the right to manage ALECO. San Miguel has disclosed that the bid was “considered and approved” by the cooperative.
“However, the decision of the interim board and the issuance of notice of award shall be subject to the outcome of referendum...,” it added.
Details of the transaction have not been disclosed. San Miguel officials were not immediately available for comment.
Albay was disconnected from the power grid last July 31 due to unpaid debts worth some P4 billion. Power was restored the following day after ALECO agreed to settle June 2013 obligations amounting to P19 million.
A takeover was proposed by the Energy department as a means of rehabilitating the debt-saddled cooperative. Mr. Petilla had said that three companies were interested, among them Manila Electric Co., which in the end decided not to participate in the auction.
San Miguel, which has diversified from its core food, beverage and packing businesses, posted a first-half net loss of P2.95 billion.
The conglomerate’s shares ended 9.66% lower to P65.50 apiece yesterday from the P72.50 seen last Friday. source
“The referendum pushed through. There were more than 9,000 households who participated. Private sector participation won with more than 5,500 votes,” Mr. Petilla said.
The other option given to Albay residents was the entry of a team from another electric cooperative.
Mr. Petilla acknowledged that the number of referendum participants represented just a fraction of the 208,000 households that ALECO services in the province.
“But it turned out that people who participated favored the entry of San Miguel so the others will have to support that. There was a massive information campaign for the referendum. Everyone was given a chance to vote,” he noted.
ALECO’s board of directors is now expected to meet with San Miguel representatives to issue a notice of award and sign a 25-year concession agreement.
“They will meet this week, on Sept. 18, for the issuance of notice and signing of the agreement. The actual date of takeover will be identified by then,” Mr. Petilla said.
“I want it as soon as possible,” he added.
He reiterated that San Miguel’s entry did not mean that ALECO was being privatized. The conglomerate, via SMC Global Power Holdings Corp. (SMC Power) will just run the cooperative, shoulder its debts and pay monthly concession fees.
SMC Global was the sole bidder in an Aug. 7 auction for the right to manage ALECO. San Miguel has disclosed that the bid was “considered and approved” by the cooperative.
“However, the decision of the interim board and the issuance of notice of award shall be subject to the outcome of referendum...,” it added.
Details of the transaction have not been disclosed. San Miguel officials were not immediately available for comment.
Albay was disconnected from the power grid last July 31 due to unpaid debts worth some P4 billion. Power was restored the following day after ALECO agreed to settle June 2013 obligations amounting to P19 million.
A takeover was proposed by the Energy department as a means of rehabilitating the debt-saddled cooperative. Mr. Petilla had said that three companies were interested, among them Manila Electric Co., which in the end decided not to participate in the auction.
San Miguel, which has diversified from its core food, beverage and packing businesses, posted a first-half net loss of P2.95 billion.
The conglomerate’s shares ended 9.66% lower to P65.50 apiece yesterday from the P72.50 seen last Friday. source
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