Mirant IPO not likely in near future

Mirant Philippines Inc. is not seeing the possibility of offering its shares to the public in the very near future, the company’s top official said over the weekend.

"We would like to have the IPO (initial public offering) but I would say today it is a little bit hard for us with the current condition of the market," Mirant Philippines president J.R. Harris said.

But Harris recognized the need for the power firm to undertake the IPO. "In 2001, there was a law requiring us to undergo IPO by 2006. We support the IPO, as we like to have owners in each of the locations we operate," he said.

Harris said the current market condition seems not to warrant an IPO just yet. "It makes it hard for us to tell what we will be actually selling and it will be also hard for the public to know what they will buy," he said.

While the firm has yet to decide on the date of the IPO, Mirant Philippines is still keen in offering its 10 percent stake to the public amounting to roughly about P18 billion.

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

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

The power company had to expand its presence in the Philippines to entice investors to buy Mirant’s shares of stock of Mirant once decides to list it in the country’s stock exchange.

Mirant, so far, has plans of investing about P240 million to P270 million for rural electrification projects in Mindanao.

MPI has also invested about P600 million to put up a 12.5 megawatts power plant in Aklan to boost electric service in the province and avert the 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 5 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, Mirant also negotiated for a 20-year 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.