Mirant needs Napocor OK for asset sale

The government wants US-based Mirant Corp. to seek the consent of the National Power Corp. (Napocor) before it auctions off its generation assets in the country, a top energy official said.

Energy Secretary Raphael P.M. Lotilla said "When the Mirant people came to see me, I made it clear to them that the standpoint of the Philippine government is that the consent of Napocor is necessary to ensure that the successor is able to deliver on the obligations under the contract."

Lotilla was reacting to the alleged claim of Mirant that it need not seek the approval of Napocor to be able to sell its generating assets in the Philippines.

"If that is their opinion, I disagree," the energy chief said when asked about the apparent defiance of Mirant to get the consent of Napocor.

For his part, Napocor president Cyril del Callar said "the need for Mirant to get the consent of Napocor is stipulated in our contract with them, and not just with them, but also for other IPPs (independent power producers). We will require that of all IPPs in the event for change in ownership."

It was learned that a ranking Mirant official met with Del Callar and allegedly told him about Mirant’s intention to sell its assets even without Napocor’s consent.

Mirant is selling about $3 billion worth of generating assets of Mirant Philippines Inc. as part of its financial restructuring after emergence from bankruptcy.

But it was learned that there may be a delay in the sale of Mirant assets in the Philippines due to several issues that have yet to be resolved.

Mirant is also being subjected to a congressional inquiry for alleged ly trying to avoid payment of taxes when it acquired a $735-million syndicated loan.

The sale of the assets initially scheduled for the last quarter of this year is expected to be deferred because of these unresolved issues.

Napocor is also claiming a P1.35-billion reimbursement in the form of excess payments to Mirant in connection with the 200 MW excess capacity of the 1,200 MW Sual power plant in Pangasinan.

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

Another impediment to the sale is the reluctance of employees to cooperate with the sale process given that no separation packages are being offered to management and the rank-and-file in the event that the new owners take over the company.