Sale of Mirant Phils faces delay due to certain issues

The sale of some $3 billion in assets owned by Mirant Philippines Inc. may be delayed due to several issues that have yet to be threshed out, an industry source said.

The sale which has been set for the last quarter of 2006 or the first quarter of next year may have to be moved, according to the source.

Among the issues that need to be resolved are the P1.35 billion in excess payments made by the National Power Corp. to Mirant in connection with the 200 MW excess capacity of the 1,200 MW Sual Power Plant in Pangasinan for which Napocor is seeking reimbursement.

Another issue is the non-payment of real property taxes (RPT) for Mirant’s 735 MW facility in Pagbilao, Quezon for the past years, amounting to close to P4 billion. The case is pending in the Supreme Court.

The source said considering the large amounts that have to be settled, potential investors may want to see the resolution of these cases before finalizing any deal.

Another impediment, according to the source, is the reluctance of employees to cooperate in the sale process because no separation packages are being offered to both management and rank and file in the event that the new owners take over the company.

"It is but normal for long-time employees to want to have their tenure protected. As is the practice when a large company is being sold, a reasonable severance package should be offered to employees if the sale is to be finalized soon as their cooperation is essential to the process," the source said.

When reached for comment, Mirant officials declined to comment on the matter.

Atlanta-based Mirant Corp. had announced recently the start of an auction process to divest its Philippine assets, namely the 1,200 MW Sual plant, the 735 MW Pagbilao plant and its 20 percent share in the Ilijan natural gas facility.