Manila: The joint acquisition deal for a liquefied natural gas (LNG) terminal involving the country's largest power firms owned by tycoons Manuel V. Pangilinan, Sabin Aboitiz, and Ramon S. Ang has reached a financial close. In a disclosure to the stock exchange on Tuesday, Manila Electric Company announced that its wholly owned subsidiary Meralco PowerGen Corporation (MGEN), along with San Miguel Global Power Holdings Corp. (SMGP) and Aboitiz Power Corporation through its subsidiary, Therma NatGas Power Inc. (TNGP), have finalized the USD3.3-billion partnership.
According to Philippines News Agency, the deal involves the acquisition of a 67-percent stake by Chromite Gas Holdings, Inc. (CGHI) from SMGP in South Premiere Power Corp. (SPPC), Excellent Energy Resources Inc. (EERI), and Ilijan Primeline Industrial Estate Corp. (IPIEC). Chromite is a 60-40 percent joint venture between MGen and Therma NatGas Power Inc. Additionally, Chromite and SMGP are acquiring 100 percent of Linseed Field Corp. (LFC) to operate an LNG terminal in Batangas City.
As a result of these acquisitions, MGen and TNGP, through their 60-40 stakes in CGHI, will own 67 percent of SPPC, EERI, and IPIEC, while SMGP retains a 33-percent stake in these entities and gains a corresponding interest in LFC. The Philippine Competition Commission (PCC) approved the acquisition deal in December of the previous year. The PCC stated that the deal is critical for strengthening the country's energy supply and is subject to conditions aimed at ensuring fair competition and promoting transparency.
The PCC identified competition concerns during the review process, including risks of coordination in the national power generation market and foreclosure in power supply deals with distribution utility companies. The involved firms submitted voluntary commitments to address these issues. The PCC reviewed and validated the commitments with input from industry players, stakeholders, the Department of Energy (DOE), and the Energy Regulatory Commission. Safeguard measures include PCC oversight of the competitive selection process to prevent collusion, submission of power plants' unplanned outages reports to the PCC within seven days after reporting to the DOE, and the appointment of a competition compliance officer to ensure fulfillment of these commitments.
