Local Mirant unit prepares for smooth transition

Mirant Philippines Corp., the local subsidiary of Atlanta-based Mirant Corp., said it will continue to operate normally as it remains committed to its employees and the communities it serves.

"We look forward to a smooth and orderly transition, in close coordination with the relevant government agencies until after our auction process is completed," Mirant Philippines chairman and president Jose Leviste Jr. said yesterday.

Mirant Philippines’ parent firm announced the other day that it will sell all of its remaining assets in the Philippines and the Carribean as part of its strategy to restructure its finances after emerging from bankruptcy protection.

Leviste said Mirant’s pullout from the Philippines will not mean it would not be continuing its commitment to the country. "Our Philippine assets will continue to operate efficiently and deliver on commitments to the government, our clients and our stakeholders," he said.

According to Leviste, the divestment decision is purely a business issue. "The recent announcement that Mirant plans to divest its ownership interest in the Philippines is a corporate decision reflective of our company’s desire to deliver results to shareholders by realigning our business strategy."

He said they hope Mirant’s decision will not impact on the Philippine economy as a whole. "We remain very optimistic on the Philippine economy and the future of the country. The government has taken great strides in making the country an ideal destination for foreign direct investments."

He said there are already a number of companies that have expressed interest in acquiring the company’s Philippine businesses, among them foreign groups like AIG, One Energy, Mitsubishi, China Light & Power, Korea Electric Co., Tokyo Electric, and Kyushu Electric, as well a local investors such as the Ayalas, the Aboitizes, the Lopezes and telecom tycoon Manuel Pangilinan.

"This clearly indicates confidence in the Philippines and its economy as a whole," Leviste said.

"With the steady increase in economic activity and the subsequent rise in demand for power, we anticipate exciting and positive developments to take place in the industry in the coming years," he said.

Mirant Philippines Corp. is the country’s largest privately-owned power producer. Its assets are valued at approximately $2 billion.

With the sale of the assets, Mirant said these businesses will be regarded as "discontinued operations" starting the third quarter of 2006.

Once approved, the sales are expected to close by mid-2007. As Mirant generates cash from these sales, it plans to continue returning cash to its shareholders while maximizing the value of its net operating loss carryforwards.

Mirant has ownership interests in three generating facilities in the Philippines: the 1,218-megawatt Sual, the 735-MW Pagbilao and a 20-percent stake in the 1,500-MW Ilijan. The Philippine businesses contributed $370 million in gross earnings for the parent firm in 2005, or about half of total global earnings.