Filinvest joins bid for PNOC-EDC stake

Filinvest Development Corp., the listed holding firm of the Gotianun family, is making a move into the highly lucrative energy sector business as it joins a diverse mix of companies vying for the government’s stake in geothermal power producer PNOC-Energy Development Corp.

In a disclosure to the Philippine Stock Exchange, FDC said it has submitted requirements to prequalify for the bidding of the government’s remaining 60-percent stake in PNOC-EDC.

“FDC is looking into the investment potential offered by this bidding to provide further value to our stockholders. We also see it as a unique opportunity to enter the renewable energy growth sector,” said FDC president Josephine Gotianun-Yap in a disclosure to the Philippine Stock Exchange.

FDC is into the property development and banking businesses through subsidiaries Filinvest Land Inc., Filinvest Alabang Inc. and East West Banking Corp.

Just recently, the holding firm acquired Pacific Sugar Holdings Corp., which owns two sugar mills with a combined milling capacity of 9,000 tons per day.

The prequalified bidders will be known on Oct. 10 with the final qualification set for Oct. 26. The submission of bids is scheduled on Nov. 21.

PNOC-EDC earlier announced that there were 24 groups that have signified their intention to bid for PNOC-EDC.  The list includes a local consortium of businessmen headed by Ramon Ang, Henry Sy Jr. and Joselito Campos; local power firms First Gen Corp., Aboitiz Power Corp., Alsons Consolidated Resources Inc. and Basic Energy Corp.; ATN Holdings Inc., and foreign investment banking firms ABN-AMRO Bank, Israeli company Africa-Israel Group, and Iceland companies Geysir Green Energy and Reyjavik Energy Invest.

Also included are Japanese firms Kanematsu Corp., Orix Corp. and Sumitomo Corp. as well as Bangkok-based Suez Energy Asia Co. Ltd. and Marubeni Philippines Corp.

Law firms Latham & Watkins LLP, Belo Gozon Elma Parel Asuncion & Lucila, and Sycip Salazar Hernandez & Gatmaitan Law offices are likewise included in the list.

The winning bidder is expected to control about 60 percent of the country’s total installed  geothermal capacity and have exclusive exploration and development rights over key geothermal reserve  areas in  the Philippines through long-term contracts with the government.

The government expects to generate P32 billion to P36 billion from the sale.

PNOC-EDC stake is one of the big-ticket power assets of the government up for privatization this year. On Dec. 13, 2006, the company raised P15 billion to P16 billion from an initial public offering of shares and another P17 billion from the 420-percent block sale in July last year.

The privatization of the geothermal arm of PNOC is part of the National Government’s efforts to encourage private participation in the energy sector.

PNOC-EDC  has four geothermal production fields: Bacon-Manito (150 mw), Leyte (701 mw), Southern Negros (192 mw) and Mindanao Geothermal Production Field (106 mw), totaling 1,149 mw.

Majority or 75 percent of PNOC-EDC’s revenues comes from the sale of electricity while 23 percent is being derived from the sale of steam to power plants operated by the National Power Corp.