EDC is shortlisted as buyer of Chevron geothermal

Published November 13, 2016, 10:01 PM By Myrna M. Velasco
http://business.mb.com.ph/2016/11/13/edc-is-shortlisted-as-buyer-of-chevron-geothermal/

Lopez-owned Energy Development Corporation made it to the shortlist of prospective buyers of the Southeast Asian geothermal assets of American energy giant Chevron Corporation.

This was disclosed to the media by EDC Chief Financial Officer Nestor H. Vasay, emphasizing that their company is among the three Filipino firms in the anticipated five-group contest for the Indonesia and Philippine geothermal facilities of Chevron.

Aside from EDC, the two other Filipino firms in the shortlist that are also keenly calculating their bets are the Aboitiz and Ayala groups. The other contender is reportedly Indonesian firm PT Medco Power; and another one is a Japanese firm.

“There were seven investor-groups that submitted, but they just have shortlisted five companies,” he said.

Vasay said they have partnered with Japanese firms Mitsui & Co. Ltd. and Kyushu Electric Power Co. Inc. in the Chevron acquisition – one that they had firmed up prior to bid submission last October 31.

The EDC executive relayed that the initial expectation on bid submissions had been way higher – but that was slashed to a leaner number following the interest fallout of Italian firm Enel and Indonesian state-run firm Perusahaan Listrik Negara (PLN) as well as some Chinese firms.

Investment figures floating for the Chevron assets had been at $3.0 billion to $5.0 billion for both its Tiwi-MakBan steamfields in the Philippines and the Salak steamfield asset in Indonesia.

In the bid submission, Vasay noted that there had been option to separate the offers for the two assets, “but I think all the bidders actually submitted for both.”

Nevertheless, he opined that such “would not prevent Chevron from choosing the higher bid for Philippine assets and then also choosing the higher bid for the Indonesian asset.”

For the interested parties though, he qualified that one consideration they had factored in is the ‘right of first refusal’ accorded to Chevron’s current Philippine partner for the Tiwi-MakBan steamfields – which is the Sy group.

Following submission of offers, Vasay said their expectation is for Chevron to “evaluate the bids and then we expect that they’ll get back to the shortlisted companies and then discuss some more, then probably decide.

Sale decision is anticipated before the end of the year. Tapped as advisor to the transaction is Citigroup, Inc.