Prospective buyers of Mirant assets to start due diligence

Prospective bidders of Mirant Philippines Inc.’s assets are expected to start their respective due diligence on Sept. 12, industry sources said yesterday.

The sources said Mirant Corp. has already concluded accepting indicative bids from interested groups.

It was learned that the interested groups, which had expressed deep concern over major issues confronting the sale, have submitted lower than expected bids of Mirant.

Among the main issues raised by interested parties is the National Power Corp. (Napocor)’s claim for Mirant to secure government’s approval before proceeding with the sale.

Another bone of contention is the fate of the employees of Mirant Philippines, particularly the rank-and-file, who reportedly have not been offered a severance package.

"There have been major issues that we raised, like the government consent issue and the employees, and we’ll see how Mirant will tackle them as we move forward," an official from an interested group said.

The Joint Congressional Power Commission (JCPC) has also expressed concern over the issue of consent.

According to sources, these two major concerns are more complicated than the unpaid real estate taxes and contractual obligations with Napocor as these would be settled by adjusting valuation of the sale.

It was learned that among those that have submitted their indicative bids for Mirant’s equity in the Philippines last Aug. 31 were the group composed of Marubeni Corp., Tokyo Electric Power Corp., and First Gen Corp.; consortium of Korea Electric Power Corp., Chubu Electric Power Co. and Tractebel/Suez; and the group of One Energy, China Light and Power, Mitsubishi Corp.

The Aboitiz group reportedly did not submit its indicative bid. An Aboitiz insider earlier described Mirant as a "monster that we (Philippines) created. It is so big (to handle)."

Mirant’s assets in the Philippines are valued at $2.4 billion to $2.8 billion. Mirant’s assets in the country include its interest in three generating power plants, namely Pagbilao, Sual and Ilijan.