UK firm, 3 others show interest in Napocor assets

UK-based National Grid is starting to conduct its due diligence on transmission assets of the National Power Corp. (Napocor), a ranking company official said.

The official, who requested anonymity, said of the four companies which expressed keen interest to participate in the transmission assets of the state-owned power firm, only National Grid has been very aggressive. "It (National Grid) is very interested and active," the official said.

Aside from National Grid, the three other foreign firms that indicated interest in transmission assets of Napocor are: Electricite de France, Electric Development Corporation of Japan and Kyushu Corp.

In its position paper submitted to Napocor, National Grid said it "considers probable that extensive due diligence work will be required to determine the initial relationship between the book value of the assets (reflecting any prior write-offs), the actual condition of the assets and future asset-life expectations."

"The basis of a derived valuation will then be agreed to establish a relationship between initial revenue and initial assets rate base," it said.

Under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA), the Power Sectors Assets and Liabilities Management Corp. (PSALM), an entity formed to handle the privatization of the Transco and the generation assets of Napocor, will sell the transmission company of Napocor through either an outright sale or concession.

The government intends to raise some $2.4 billion to $2.7 billion from the sale of the Napocor’s transmission assets.

The company, with market capitalization of $11 billion, is a publicly held company listed in London and New York Stock Exchange. It has an annual turnover of $5.4 billion as of end-December 2000 delivering an operating profit of $1.04 billion.