Posted on 07/19/2006 6:44:48 AM PDT by MeneMeneTekelUpharsin
SINGAPORE (Reuters) - U.S.-based electricity producer Mirant Corp. (NYSE:MIR - News) has begun seeking bids for its multi-billion dollar power plants in the Philippines, sources familiar with the matter said on Wednesday. Mirant has sent out a short sale document on the asset to potential bidders, including some Japanese firms and financial investors, the sources, who asked not to be identified, told Reuters. Mirant is selling its ownership interest in three generating facilities in the Philippines -- in Sual, Pagbilao and Ilijan -- that account for 2,203 MW in generating capacity.
Banking sources say the Philippine asset, estimated by some to have an enterprise value of nearly $3 billion, is likely to generate strong investor interest because of the lucrative long-term power purchase agreements it holds. The independent power producer is expected to conduct the auction in two stages, asking interested parties to submit indicative bids by the end of August, with binding bids due by the end of this year, said one source. Tuesday was the deadline for potential bidders to submit initial expressions of interest. "Plenty of people have expressed interest. There is sufficient demand. People have been waiting for this for a long time," the source said.
Credit Suisse (CSGN.VX), Mirant's financial advisor on the sale, declined to comment. Mirant, which emerged from bankruptcy in January, said last week it would auction its Philippine and Caribbean businesses and expected the transactions to close by mid-2007. It also plans to buy back up to $1.25 billion of its shares as it seeks to raise its stock price after dropping an unsolicited bid to buy rival NRG Energy Inc. (NYSE:NRG - News). A sale of Mirant's plants in the southeast Asian nation -- which accounts for nearly half of Mirant's overall cash flow -- would be the last major auction of power assets by a U.S. utility in the region.
The asset's long-term sale contracts could provide stable revenue sought by financial investors and by some Japanese trading houses that have been ramping up investments recently in the cyclical natural resources industry. But some Western investors may decide the economic and political risks in the Philippines are too high, banking sources said. Regional power investors such as OneEnergy Ltd. -- a venture of CLP Holdings Ltd. (HKSE:0002.HK - News) and Mitsubishi Corp. (Tokyo:8058.T - News) -- International Power Plc (London:IPR.L - News), Mitsui (Tokyo:8031.T - News), and Marubeni (Tokyo:8002.T - News) might be interested, some sources have told Reuters.
They also said financial investors such as American International Group (NYSE:AIG - News) could be interested as well. AIG and the Ontario Teachers' Pension Plan recently won the multi-billion dollar assets of global power venture of Intergen. Mitsui and International Power won Edison Mission's overseas portfolio. The sources told Reuters that Mirant was expected to release a memorandum with substantial details of the Philippine asset to interested parties by early August. Investors who make it to the second round will be provided with full data before the deadline for final bids, they said.
Fellas, check this out. And you, TopQuark, do you remember YOUR comments of 2-3 years ago? I do.
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