Mirant still keen on P18-B IPO

Mirant Philippines Inc. (MPI) is still keen on offering its 10-percent stake to the public worth roughly P18 billion, a ranking company official said.

MPI president Edgardo Bautista told reporters yesterday that the company is currently preparing the organization for such an offering which is "probably going to happen this year."

"We are readying our organizational structure for this kind of public offering. Some necessary preparations are ongoing. We have to finish a very long process before we can proceed with the offering. It’s a very long process. If we can complete it this year, we can make the offering (within the year)," Bautista said.

Bautista, however, admitted that they are still studying whether they will be undertaking an initial public offering (IPO) at the stock exchange or will also allow strategic investors to buy into the company.

"P18 billion is very big to be offered in the exchange. We are still looking at our options," he said.

According to Bautista, they have not yet identified a financial advisor that will handle the offering. "The selection of a financial advisor will come later," he said.

The Philippine government, through the Department of Energy (DOE), has been urging MPI to issue about 10 to 15 percent of its shares in the Philippine Stock Exchange (PSE) as the company has been recognized as the country’s biggest revenue earner for the past two years.

MPI, a wholly-owned subsidiary of US-based Mirant Corp., has been aggressively investing in several power projects in the country to justify its IPO plans.

Bautista had said that the company had to expand its presence in the Philippines to entice investors to buy its shares once it decides to list it at the stock exchange.

The company official said they will be investing about P240 million to P270 million for rural electrification projects in Mindanao. This year, they expect to pour in about P160 million for Mindanao-based energization program.

MPI has also invested about P600 million to put up a 12.5-megawatt power plant in Aklan to boost electric service in the province and avert an impending power shortage in the Visayas region.

It signed two electric power purchase agreements with Aklan Electric Cooperative (Akelco) to build and operate a 7.5-MW plant and a five MW facility in Nabas and New Washington towns, specifically to address the supply of power to tourist spot Boracay. Both facilities will be operational by the first quarter next year.

Aside from these two new power plants, MPI also concluded negotiations for a 20-year build-operate-and-own (BOO) energy supply contract with the Iloilo-1 Electric Cooperative Inc. (ILECO-1). Under the agreement, Mirant will finance, construct, operate and maintain a 10-MW diesel generating power station in Iloilo as well as rehabilitate and upgrade ILECO-1’s 13.2kV distribution lines in the municipalities of Sta. Barbara and Pavia.

MPI, with Claredon Towers Holdings Inc, also acquired the 72-MW Panay Power Corp. from First Philippine Holdings and First Generation Holdings Corp. The acquisition involved the generation of an additional 40-MW capacity for the province of Iloilo.

The power firm has installed 2,000 MW of generating capacity nationwide. It also owns a share in the 1,200-MW natural gas-fired Iligan power plant. It also operates Pagbilao and Sual coal-fired power plants and holds a 20-percent stake in the Ilijan natural gas-fired power plant.

MPI, the country’s largest private power producer, also invested some P235 million ($4.3 million) to upgrade the transmission facilities of the Baguio City Economic Zone (BCEZ).

It also recently ventured into other power facilities project in Toledo in Cebu.