Fil-Malaysian group still keen on TransCo

In a last ditch effort to convince the government to hold another bidding for the National Transmission Corp. (TransCo), the Filipino-Malaysian consortium of Triratna Holdings Corp., Newbridge Asia IV L.P., and Tenaga Nasional Berhad (TNT) said yesterday it is willing to submit "an attractive bid" should the government decide to hold another auction.

"The consortium remains very interested in participating in the privatization process and in giving the government a highly competitive valuation to this key asset. We are prepared to put in an attractive bid and we are hopeful that PSALM will address our concerns," the group said in a press statement.

The bidding of TransCo failed last Monday, Feb. 5, after only one bidder, Citadel Holdings Inc. and Terna SPA of Italy, submitted a bid. Citadel is composed of the Delgado family who are in the business of exports and logistics.

The Filipino-Malaysian consortium, led by businessmen Ramon Ang of San Miguel Corp., Henry Sy Jr. of the SM Group and Joselito Campos of United Laboratories, was one of the two groups that did not submit their bids during the TransCo bidding due to a number of issues that remain to be resolved by the government. The other group is the consortium of Monte Oro Grid Resources Corp. and State Grid Corp. of China which is represented by businessman Walter B. Brown.

PSALM president Nieves Osorio told a press conference after the failed bidding process last Feb. 5 that they have discussed these issues and concerns with the prequalified bidders.

"PSALM believes that we have addressed and taken a position. The board will reexamine their issues but they were resolved in accordance with what the government can accommodate," Osorio said.

The group pointed out that they have valid reasons for not submitting a bid last Feb. 5 for TransCo’s 25-year concession contract.

"The consortium of Triratna Holdings Corp., Newbridge Asia IV L.P. and Tenaga Nasional Berhad was not able to submit a bid due to important structural issues in the final transaction documents issued by PSALM," it said.

They said the PSALM board should look at their arguments and concerns before deciding on the next step to take on TransCo’s privatization.

"The consortium believes that its requests are highly reasonable as they are entirely consistent with customary terms for an international M&A transaction," it said.

The group said that "on bidding day, the consortium approached Osorio to request her to defer the bidding date until the disclosure letter is in its final form and reconsider the key points that would allow the consortium to participate."

"The consortium likewise provided the PSALM board with copies of their $30 million bid bond as good faith to demonstrate its willingness to join in the bidding process provided the committee addressed the important documentation issues," it said.

Aside from copies of the bid bond, they said the consortium submitted their proposed language and reiterated that they would be prepared to submit a very competitive bid if the documentation issues were addressed.

Meanwhile, Citadel/Terna representative Rogelio Singson said the PSALM board will be able "to see the wisdom of entering into a negotiated bid".

"They (PSALM board) should realize that if we will be able to complete the transaction this year, our supposed $750-million downpayment would help the government wipe out the budget deficit by 2008. They could attain the balanced budget by next year," Singson said.

Singson said the $150-million additional capital expenditure of TransCo being inputted in the General Appropriations Act (GAA) every year could be taken care off by the new concessionaire.

"The budget that is supposed to go to TransCo’s capex could be taken out of the GAA and it could be used to fund other social services and projects of the government. The PSALM board should be able to see the economic impact of getting the TransCo deal done the soonest possible time," he said.