Mirant to draw down $735-M loan to finance recapitalization

US-based Mirant Corp. is set to drawdown today a $735-million term-loan to finance its recapitalization prog-ram prior to the divestment of its generation portfolio in the Philippines.

The loan, backed by Mirant Philippines’ Pagbilao asset, was arranged by Credit Suisse which is also the power firm’s advisor for the sale of Mirant assets in the Philippines.

Mirant announced last month that it will sell all of its remaining assets in the country as part of its strategy to restructure its finances.

Banking sources said the syndicated loan will be provided by 30 banks including Citibank, HSBC, Bank of the Philippine Islands (BPI) and Banco de Oro, among others. The sources said the loan drawdown is a crucial factor to Mirant Philippines’ divestment program.

As this developed, Mirant Philippines has already identified at least four to five buyers of its generation assets.

A reliable industry source said those firms that have expressed keen interest to buy Mirant assets in the Philippines are: AIG, One Energy, Mitsubishi, China Light & Power, Korea Electric Co., Tokyo Electric, and Kyushu Electric.

Among the local investors that are also eyeing Mirant asssets, the source said, are the Ayalas, Aboitizes and telecom tycoon Manuel Pangilinan.

"The bulk of the loan will be used to settle outstanding obligations of Mirant Philippines" so they can proceed smoothly with the sale of the assets, sources said.

They also said the term-loan will be re-channeled back to its US headquarters "to service the parent company’s debts." Mirant Philippines also has to settle some of its obligations with various state-run entities, including the National Power Corp. (Napocor).

Mirant has ownership interests in three generating facilities in the Philippines: 1,218 MW Sual, 735 MW Pagbilao and 20 percent stake in the 1,500 MW Ilijan. Its net ownership interest in these three generating facilities to be sold is 2,203 MW.