Asia’s energy giants join bidding for Mirant assets

The bidding for the assets of Mirant Philippines Corp. held yesterday in Singapore was swarmed by Asian energy giants although management still opted to remain mum on the results of the process.

Japan’s Chubu Electric Power Co. said Sojitz Corp. and Malaysia’s Tanjung Bin Power Sdn. have joined the five groups bidding for Mirant’s power assets in a sale forecast to raise as much as $3.5 billion, bankers said.

Industry sources said Chubu Electric and Sojitz have joined a consortium led by Korea Electric Power Corp. (Kepco), South Korea’s largest utility, and Suez SA, France’s biggest electricity supplier.

"The Kepco bidding team are now in Singapore. If there would be no changes in conditions of the sale, the Kepco group will submit their bid," the sources said.

Japan’s Marubeni Corp. is also putting in a bid with Tokyo Electric Power Co., Asia’s biggest power producer and First Gen Corp., one of the largest power suppliers in the Philippines.

Another group consists of Hong Kong-based CLP Holdings Ltd., Mitsubishi Corp., Japan’s largest trading company, and Malaysia’s Tanjung Bin Power, according to the bankers.

Another proposal will come from Arlington, Virginia-based AES Corp., Sumitomo Corp. and Kansai Electric Power Co. of Japan.

Japan’s Mitsui & Co. is submitting a fifth offer with London-based International Power Plc, the financiers added.

It was learned that all the bids submitted in Singapore were in the range of $2.6 billion to $2.8 billion.

The bidding was carried out despite concerns on the fate of the Filipino employees and the absence of consent from the National Government on the sale.

For the past years, Mirant had been posting earnings from its Philippine operations. For 2005, it posted $315.05 million in operating income and this year, is seen to increase to $338.9 million.

The sale is part of Atlanta-based Mirant's plan to generate cash to return more money to shareholders, either by buying back shares or paying dividends. The deadline for offers was extended from Nov. 7 to give more time to the bidders, the bankers said.

Mirant expects to have an agreement on the sale by early next year at the latest and to close the transaction by mid-2007.

The successful buyer will pay only when Mirant gets the two plants Sual, Pangasinan working again after they broke down earlier this year, the bankers said.