OneTaipan buys Monte Oro stake in NGCP-A A +A
Wednesday, March 17, 2010
THE trust of National Grid Corporation of the Philippines (NGCP) to provide reliable and stable power supply in the country will remain.
This, even after OneTaipan Holdings, controlled by Henry Sy Jr., acquired 100 percent ownership of Monte Oro Grid Resources Corp., a company under the Ricky Razon group.
Monte Oro controls 30 percent stake in NGCP together with Calaca High Power Corporation and the Chinese Group’s State Grid Industry Development Limited, owning the other 30 percent and 40 percent, respectively.
Monte Oro sold its stake at US$ 350 million. It will be recalled that the winning bid for 100 percent of NGCP during the privatization was US$ 1 billion of equity.
OneTaipan Holdings will fund the acquisition from equity and debt arranged by a foreign financial institution.
“The investment represents our commitment to be a part of the power sector which is a critical engine to the country’s development and growth. NGCP’s ability to provide a reliable and cost-effective transmission facility and services will directly redound to the benefit of various industries and the masses,” Sy said.
The businessman added that his company will work closely with the other shareholders to ensure that NGCP delivers on its commitment to provide transmission reliability and efficiency and this, he believes, is anchored on continuously improving its facilities and keeping the NGCP workforce highly motivated.
OneTaipan’s investment will be Sy’s first foray in the power industry.
But sources in the NGCP said Calaca High Power of the Coyuito group was able to buy out the Monte Oro group led by businessman Walter Brown for US$ 590 million.
The reported buy out had been circulating the industry as of January following reports that the two groups had been fighting over control of the operations.
The NGCP consortium is composed of State Grid of China Corp. with 40 percent share as the foreign partner, Monte Oro Grid Resources Corp. with 30 percent equity and Calaca High Power Corp. with 30 percent shareholdings as the local partners.
In 2009 state-owned National Transmission Corp. (TransCo) officially turned over the management and operation of its nationwide power transmission system to NGCP.
NGCP was granted a 25 years and renewable for another 25 years concession contracts.
The concession contract amount to $3.95 billion, 25 percent of which, equivalent to $987.5 million was paid on commencement date and the balance semi-annual installments for 20 years.
Ramon Ang, president and CEO of San Miguel Corporation, meantime denied the reports that San Miguel is also involved in the OneTaipan group.
In an interview with reporters, Ang stressed that “San Miguel did not spent even one peso to join that transactions.”
He added that the Electric Power Industry Reform Act (Epira) of 2001 also prohibits a company from being engaged in transmission and in generation.
The Power Sector Assets and Liabilities Management Corp., the government privatization arm and facilitated the privatization of TransCo., said it would still review the transactions among the shareholders to determine if it still conforms with the provisions of the concession agreement.
“It is part of our duty to regularly review the compliance of the concessionaire to the agreement signed with the government,” Power Sector Assets and Liabilities Management Corporation (PSALM) vice president Conrad Tolentino said.
He added: “We always presume that the agreement within the company was done in good faith and we are not assuming that there would be violations. But it would be prudent for PSALM to check on the compliance with the concession agreement.”
Calaca High Power now controls 60 percent in the NGCP.
It would be noted that NGCP, in a petition to the Energy Regulatory Commission (ERC), said its proposed capex budget is more than double the roughly P40 billion government allocated for the power grid from 2006 to 2010.
For the year 2010-2011, NGCP programmed P32.08 billion and for the year 2014-2015 it plans to spend P21.48 billion, P18.06 billion, P10.58 billion, and P7.74 billion. (MSN/Sunnex)