The subsidiaries of Manila Electric Co. (Meralco), Aboitiz Power Corp. (Aboitizpower) and San Miguel Corp. (SMC) have completed their $ 3.3 billion deal to build an integrated liquid natural gas (LNG) facility in Batangas.
In separate announcements, the Energy Giants said that Meralco Powergen Corp. (Mgen), Therma Natgas Power, Inc. (TNGP) and San Miguel Global Power Holdings Corp. (SMGP) successfully completed all financial arrangements that are needed for the deal.
MGen is the Power-Generation Arm from Meralco, while TNGP is a complete subsidiary of Aboitizpower via Therma Power, Inc. SMGP is the power -poor CONglomerate SMC.
Under the deal, MGEN and TNGP, via their 60:40 Joint Venture Chromite Gas Holdings, Inc. (CGHI), Investing in South Premiere Power Corp. (SPPC), Excellent Energy Resources, Inc. (Eeri) and Iilijan Primeline Industrial Estate Corp. (Ipiec).
SPPC is the owner-operator of the 1,278-megawatt (MW) Ilijan combined cycle gas plant, while honor is the owner operator of the 1,320 MW combined cycle gas factory under construction. Ipiec is the owner of the plant locations of SPPC and Eeri.
MGEN and TNGP, together with SMGP, will acquire the Batangas-based LNG import and registry turbine that is owned by Linseed Field Corp. (LFC), who will “process and deliver the LNG requirements of the SPPC power plants.”
SPPC, Eeri and Ipiec were formerly full subsidiaries of SMGP, SMC said.
With the completion of the transactions, CGHI will have 67% of the three companies. SMGP retains a share interest of 33% in SPPC, Eeri, Ipiec and LFC.
The financial closure came one month after the Philippine Competition Commission had approved the Mega deal, allowing the parties to continue their joint acquisition of power facilities and the LNG terminal, subject to certain conditions.
In a legal submission last week, Meralco said that the P75 billion would borrow from BDO Unibank, Inc., Bank of the Philippine Islands, and Metropolitan Bank & Trust Co., which has been affordable for more than 12 years.
Meralco Chief Finance Officer Betty C. Siy-Yap said via Viber that the credit facility is intended for the “acquisition of investments in project chromite” and “within week” will be signed.
First Grade Finance, Inc. Managing Director Astro C. del Castillo said that the historic deal is expected to “stimulate the generation capacity of the two gas -fired power plants, which contributes to a more stable and reliable food for the country.”
“However, the company could avoid the public and supervisors, because a few dominant players will control a significant part of the energy supply,” he said via Viber.
“Regulating supervision is crucial to guarantee a level playing field in the energy sector and that measures for consumer protection are present.”
Monalisa C. Dimalanta, chairman and Chief Executive Officer of the Energy Regulatory Commission, said earlier that the committee must revise the LNG deal to ensure that the companies adhere to the limitations of the market share and to revise the offers of power supply .
Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
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