Power Sector Assets and Liabilities Management Corp. (PSALM) president Nieves Osorio said the consent of the creditors is a crucial component in completing the sale process.
Osorio said the Asian Development Bank, the World Bank and the Japan Bank for International Cooperation gave their individual consents to the sale and transfer of the power facility, which was bid out last Sept. 8 and won by FGHPC with an offer of $129 million.
PSALM is a government entity tasked to oversee the privatization of Napocor’s assets.
According to Osorio, FGHPC has also delivered its certificate of closing and documentary deliverables and has posted a performance bond of $2.58 million, which is equivalent to two percent of the purchase price.
The completion of the closing deliverables by both parties paves the way for the turnover of the Nueva Ecija-based power facility.
"The turnover of the Pantabangan-Masiway hydroelectric power plant complex to FGHPC marks another milestone in the ongoing privatization efforts of the government to fasttrack the restructuring and privatization of the country’s electric power industry," Osorio said.
The operational turnover of the 100-MW Pantabangan and 12-MW Masiway hydro power plants will be held at the Pantabangan plant site in Pantabangan, Nueva Ecija.
Under the asset purchase agreement (APA) executed between PSALM and FGHPC, PSALM as the "seller" is required to submit to FGHPC, the "buyer," the certificate of closing and deliverables to complete the transaction.
PSALM has complied with all the conditions stipulated in the APA, the primary requisite for closing the contract. Specifically, the consents and proceedings allowing the transfer of the purchased assets, as specified in the APA, from the Napocor to PSALM and from PSALM to FGHPC have been secured and completed.
PSALM has likewise delivered to FGHPC its closing deliverables. These include the certificate of closing, the certificate of the seller’s representations and warranties as of the closing date, and a transmittal of deliverables acknowledged before a person authorized to administer oaths.
"Let us give credit to the Napocor plant personnel whose diligence in operating and maintaining the Pantabangan-Masiway facility allowed the government to seek the optimum value of the power plant," Osorio said.
"We would also like to thank the National Irrigation Administration for its cooperation and support in forging the pperation and maintenance agreement for the non-power component to ensure the continued safe and reliable operation of the dam, reservoir and other structures," she added.
Osorio also lauded the Department of Environment and Natural Resources and the Protected Area Management Board (PAMB) for allowing PSALM to continue administering the Masiway land through a Memorandum of Agreement signed between PSALM and the PAMB for purposes of power generation.
PSALM, under the terms of the APA, can now require FGHPC to deliver at least 40 percent of the purchase price as upfront payment payable on or before the closing date. The balance of 60 percent may be paid in 14 equal semi-annual payments with an interest of 12 percent per annum compounded semi-annually. FGHPC will also be required to post a deferred payment security deposit.