Sources said this has prompted one of the most aggressive bidders of Mirant assets, One Energy Group, to reportedly drop its bid for the said assets.
It was reported earlier that Mirant Corp. has been conducting negotiations with the Marubeni and One Energy groups since the two were among those that have tendered the highest bids during the submission of offer held last Nov. 23 in Singapore.
Despite the ongoing talks with Marubeni and One Energy, it was learned that Mirant Corp.’s financial advisor, Credit Suisse, did not stop pursuing simultaneous discussions with other top bidders like the group of Mitsui Corp. and UK firm International Power; as well as Korea Electric Power Corp. and its partner, French firm Suez SA.
But sources said that despite this new twist, Mirant does not want to declare any winner yet as the power firm does not want to close its doors for those who could meet all its requirements, particularly a higher price offer for the assets.
According to the sources, Mirant will continue its negotiations with the two frontrunners and other top bidders until after the deadline for the finalization of the sale which is set on Friday, Dec. 15.
A purchase sale agreement (PSA) is expected to be sealed by Dec. 20, 2006.
It was also learned that the closing of the sale contract still hinges on the ability of Mirant Philippines to resume the commercial operations of its 1,200-megawatt Sual coal-fired power facility expected by May or June next year.
The sources said Mirant is in a last ditch effort to convince the interested parties they are talking with to remove the "commercial conditions" tied to their respective bids.
It will be recalled that Mirant itself has also set conditions for potential buyers of its assets.
It was reportedly stipulated in the PSA that the buyer should assume all the liabilities of Mirant to its employees and the government.
Specifically, the buyer should secure government consent (through the National Power Corp.) on the sale.
On the employee severance package, the PSA prescribes that the buyer shall honor the policy of 2.5 months for every year of service severance package for two years.
The buyer, under the PSA, should also assume all remaining financial obligations that Mirant will not be able to settle before the closing of transaction – including P1.5 billion overpayments demanded by Napocor and real property tax payments.