AES finalizing $200-M loan

The local unit of American energy giant AES is finalizing about $200-million syndicated loan from three local banks to finance its purchase of the Masinloc cost-fired power plant in Zambales, a ranking company official said.

AES Philippines president Matthew Bartley said they are now in the process of securing the loan from Rizal Commercial Banking Corp., Security Banking Corp. and Bank of the Philippine Islands.

On top of this loan, he said AES is also tapping ING Bank for financial assistance.

“In addition to the equity investment, financing will come from long term loans from multilateral lenders International Finance Corp. and Asian Development Bank, and one international bank, ING Bank,” Bartley said.

IFC has already approved a loan amounting to $275 million while the ADB has approved the financing for up to $200 million.

AES is hoping to complete the entire $930 million acquisition cost for the 600-megawatt Masinloc  plant by the middle of this month. “We are working diligently to close the sale by mid-April,” Bartley said.

Masinloc Power Partners Corp. (MPPC) the corporate vehicle used by AES in winning the bid for the Zambales plant last year.

According to Bartley, they have signified their intention to make the payment on a “one time” basis.

Bartley earlier said they will invest an additional $1 billion to double the capacity of the Masinloc plant in the near future.

Power Sector Assets and Liabilities Management Corp. (PSALM) president Jose Ibazeta said AES has indicated keen interest to close the deal on April 14. “We will sign the closing documents on April 14 and they can come up with the payment after 30 days from signing,” he said. PSALM is the stage agency tasked to oversee the sale of the National Power Corp.’s assets.

Under the sales agreement, the winning bidder should pay up the 40-percent upfront payment for the turnover of the asset.

This downpayment, on the other hand, is crucial for the government as proceeds from the sale of the Napocor assets is being used to pay up loans and help improve the state’s budget position.

MPPC, the consortium led by Singapore-based AES Transpower Pte. Ltd. (AES), won the bidding for the Masinloc coal-fired thermal power plant in July 2007 with its offer of $930 million.

The asset purchase agreement for the Masinloc power plant provides that the transaction should close no later than 270 days after the effective date of Aug. 28, 2007.