Korea’s Kepco buys 43.8% of listed Salcon Power for P1.18B

Kepco Philippines Corp., the local subsidiary of Korea Electric Power Corp., and other investors have agreed to acquire 43.8 percent of publicly-listed electricity generator Salcon Power Co. for P1.18 billion.

In a disclosure to the Philippine Stock Exchange, Salcon said a total of 654.995 million of its shares would be sold to Kephilco, a unit of Korea Electric Power, and IJ Group for P1.80 each.

Of the total, 597.998 million shares, representing 40 percent of Salcon, will be sold to Kephilco.

The remaining shares will be purchased by IJ Group, comprised of Jad Holdings Inc. and Intrepid Holdings Inc.

Salcon said after the purchase, a tender offer will be made with the IJ Group to acquire the shares tendered by the public.

"If the transaction does not close by Feb. 21, 2006, the agreement will terminate and cease to be of force and effect, unless otherwise agreed by the parties," Salcon said.

Salcon and Kephilco are independent power producers supplying electricity to the state-owned National Power Corp. (Napocor).

Salcon and Kephilco are putting up two 100-megawatt coal-fired power plants in Naga, Cebu to meet the expected demands of Cebu’s developing economy. The project is estimated to cost P15 billion. Salcon has a contract with Napocor to operate and maintain the Naga Power Complex.

The company is 53.7-percent owned by SPI, a Philippine subsidiary of Salcon Ltd. of Singapore.

An additional 23.6 percent of the company’s issued and outstanding capital stock is owned by other foreign entities including 5.5 percent directly held by Salcon Limited, and the remaining 22.7 percent held by Philippine nationals.

SPI is a Philippine company, which is currently 60 percent directly owned by Salcon Ltd. a Singapore Corp. Upon completion of the planned reverse takeover being undertaken by Salcon Ltd. SPI will be 60 percent owned by ITE Electric Co. Ltd. a Singapore company, which in turn will be 75 percent owned by Salcon Ltd.

Salcon Ltd. is engaged in the development of power plants, palm oil mills, liquid storage tanks, water treatment plants, and waste water treatment plants. It has investments in companies that are engaged in power generation and distribution, environmental engineering, agro-industrial engineering, and engineering equipment and material sales in Austria, China, Germany, Indonesia, Malaysia, Philippines, Singapore, and Thailand.