The joint acquisition deal for a liquefied natural gas (LNG) terminal involving the country’s largest power firms owned by tycoons Manuel V. Pangilinan, Sabin Aboitiz, and Ramon S. Ang has reached a financial close.
In a disclosure to the stock exchange on Tuesday, Manila Electric Company said its wholly owned subsidiary Meralco PowerGen Corporation (MGEN), together with San Miguel Global Power Holdings Corp. (SMGP), and Aboitiz Power Corporation through its subsidiary, Therma NatGas Power Inc. (TNGP), completed the financial close of the USD3.3-billion partnership.
The deal involves the acquisition of a 67-percent stake by Chromite Gas Holdings, Inc. (CGHI) from SMGP in South Premiere Power Corp. (SPPC), Excellent Energy Resources Inc. (EERI), and Ilijan Primeline Industrial Estate Corp. (IPIEC).
Chromite is a 60-40 percent joint venture between MGen and Therma Natgas Power Inc.
Chromite and SMGP are also acquiring 100 percent of Linseed Field Corp. (LFC) to operate an LNG terminal in Batangas City.
As a result of the acquisitions, MGen and TNGP, through their 60-40 stakes in CGHI, will own 67 percent of SPPC, EERI, and IPIEC, while SMGP retains a 33-percent stake in these entities and gains a corresponding interest in LFC.
In December last year, the Philippine Competition Commission (PCC) approved the acquisition deal.
“The deal, which is considered critical for strengthening the country’s energy supply, is subject to conditions aimed at ensuring fair competition and promoting transparency,” the PCC earlier said.
It noted, however, that during the review, it identified competition concerns such as risks of coordination in the national power generation market and foreclosure in power supply deals with distribution utility companies.
The PCC said the involved firms submitted voluntary commitments to address the competition issues identified by the agency.
According to the PCC, the commitments were reviewed and validated, with input from industry players, stakeholders, the Department of Energy (DOE), and the Energy Regulatory Commission.
Among the safeguard measures are the PCC oversight of the competitive selection process to prevent collusion, submission of power plants’ unplanned outages reports to the PCC within seven days after reporting to the DOE, and appointing a competition compliance officer to ensure that these commitments are being fulfilled. (PNA)
