Napocor eyes Mirant’s generating assets

The National Power Corp. (Napocor) is looking into the possibility of acquiring the generating assets of Mirant Philippines Inc. and including them in the list of assets that will be auctioned off by the Power Sector Assets and Liabilities Management Corp. (PSALM), well-placed sources said yesterday.

The sources said this option is being explored by government to ease the pressure on the ongoing privatization of Napocor’s generating assets.

Mirant’s assets, deemed to be more attractive than those of Napocor, will be lumped together with Napocor’s generation companies (gencos) to sweeten the package.

It was learned that under the energy conversion agreement (ECA) signed by Napocor and Mirant’s original stockholder – Hopewell Energy – there is a clause that allows the state-run power firm to exercise a buyout option.

Sources said Napocor is studying if this option will benefit the government.

Asked to comment on the possible buyout, Napocor president Cyril del Callar said " it is an expensive option."

On the issue of tax liabilities of Mirant which will be a subject to a Congressional inquiry next week, del Callar said "we welcome the investigation of Congress. We are open to all options. We need to have more information and documents regarding these liabilities then we can decide if we will agree to the transfer of the ECA to the supposed winning bidder of Mirant assets.

Next week, a congressional inquiry will be conducted on the supposed tax liability of Atlanta-based Mirant, initially for the drawdown of its $735 million term loan intended for its equity financing and eventually the proceeds from its sale.

Rep. Joey Salceda, chairman of House committee on appropriations, earlier noted that Mirant has reportedly opted to use its Asia Pacific unit in Hong Kong to avoid documentary stamp tax, profit remittance tax and capital gains which would amount to P31 billion.

Salceda also noted that Mirant bought the assets from Hopewell for $500 million and has already repatriated $1.3 billion and is now selling the balance for $2.4 billion.

"Such contracted profitability came mainly from its lucrative IPP contracts with the Napocor covering 2,204 megawatt (MW) including Sual and Pagbilao."

In 2005, Mirant Philippines ranked 6th most profitable firm in the Philippines with at net income of P10.8 billion. Its sister firm Mirant Sual Corp. landed at 8th slot with P7.7 billion in profits.