Powercorp is a joint venture of businessman Eusebio Tanco (60 percent) and Philippine Geothermal Inc. (PGI) (40 percent).
Ed Sevilla, PGI senior associate for commercial affairs department, said the board of directors of Powercorp, in its meeting last Sept. 4 voted to shorten the term of the corporation, effectively ending Powercorp as a corporate concern.
"The corporate term of 50 years was shorten to just over two years from Aug. 5, 1999 to Sept. 15, 2001," Sevilla, said quoting company’s documents.
Sevilla said some Securities and Exchange Commission (SEC) procedures will have to be completed first before Powercorp actually ceases to exist. He said the SEC process may take a few months.
The PGI official noted that Powercorp was established by Tanco and PGI to Filipinize PGI as part of a settlement with the state-owned National Power Corp. (Napocor).
But with the passage of the Electric Power Industry Reform Act (EIRA), he said Powercorp, as envisioned, no longer conforms to the new market realities.
He explained that based on the plans for Powercorp, the company was supposed to buy the geothermal assets of Napocor if the state-run power generation firm decides to dispose them through outright sale.
The new Power Bill, however, provides that all the generation assets of Napocor including the geothermal assets will be sold through public bidding. The Powercorp’s purpose will be inconsistent with the new law, that is why its board decided to dissolve it," he said.
It was learned that the government through Power Sector Assets and Liabilities Management (PSALM) Corp. is planning to consolidate Napocor‘s Tiwi-Makban geothermal-based generation assets with geothermal steam fields that were developed by PGI.
The assets, expected to be involved in the deal, re those that are located at Tiwi, Albay and Makiling and Banahaw (Tiwi-Makban) in Laguna.