SPC Power calls off Steag acquisition

MANILA, Philippines — The SPC Power Group has called off plans to acquire the 51 percent stake of German firm Steag GmbH in Steag State Power Inc. (SPI) that operates a coal-fired thermal power plant in Misamis Orienta.

SPC Power Corp. said in a disclosure to the Philippine Stock Exchange (PSE) that the signatories of the sale and purchase agreement (SPA) terminated the deal for the 51 percent interest in SPI.

Parties to the SPA include SPC, its affiliate Intrepid Holdings Inc. and German firm Steag GmbH.

“As already disclosed, among the terms and conditions of the SPA, is the satisfaction or waiver of the conditions precedent, which is a pre-requisite for the completion of the transaction,” SPC said.

“It has been determined however, that securing completely the satisfaction or waiver of the conditions precedent is highly unlikely, thus the parties have mutually agreed to terminate the SPA,” the company added.

One of conditions for the transaction is the consent and/or waiver of pre-emptive rights by the other shareholders in SPI to the transaction.

Aboitiz Power Corp. has a 34 percent stake in SPI, while La Filipino Uygongco Corp. owns 15 percent.

The other conditions include the approval by the National Power Corp. (Napocor) and/or Power Sector Assets and Liabilities Management Corp. (PSALM), as co-obligors in the power purchase agreement, the consent of the Board of Investments (BOI) to or of the transfer of ownership/change in control of SPI, and the approval by lenders.

The SPC Power Group announced the acquisition into SPI – with SPC acquiring 40.5 percent and Intrepid purchasing 10.5 percent – for at least $52 million.

If the acquisition pushed through, SPC said that the power plant would support growth and address the country’s need for reliable, affordable and sustainable power supply.

With operations commencing in November 2006, the SPI plant was built through a Build-Operate-Transfer scheme, with the National Power Corp. as the other party to the Power Purchase Agreement with a period of 25 years.

In 2020, Steag GmbH announced plans to refocus its business and realign its organization towards decarbonization.

The German firm said that the focus of the new business segments is on smart, end-to-end energy solutions and the renewable energies market, with the transition to be implementedstarting this year.

SPC currently operates the 146.5-MW Panay diesel power plant located in Dingle, Iloilo and the 22-MW Bohol diesel power plant in Tagbilaran City, Bohol through its subsidiary SPC Island Power Corp.

It also owns the 2x100-MW KEPCO SPC Power Corp. in Colon, Naga City, Cebu as well as the 32-MW Power Barge 104.

For its distribution business, it owns majority of Bohol Light Company Inc., which provides electricity services to Tagbilaran City, Bohol. It also has a 40-percent stake in Mactan Electric Co. Inc., which powers up Lapu-Lapu City and the Municipality of Cordova in Cebu.