MANILA, Philippines, Jan. 28 (UPI) -- The Philippine government this week was expected to begin the process of divesting itself of its interest in the National Power Corp., while the company has announced plans for an international offering in an effort to raise $500 million.
But there are some concerns that the global economic recession, combined with the recent collapse of U.S. energy giant Enron Corp, may reduce the number of potential buyers for Napocor's assets and lower bidding prices.
An investment team, led by Energy Secretary Vincent Perez, will meet with U.S. and British energy companies this week to discuss the privatization of Napocor, which could generate about $5 billion in revenues for the government's coffers.
President Gloria Macapagual-Arroyo indicated she would discuss the company's privatization on her trip this week to England, Canada and the United States. She is also expected to attend this week's World Economic Forum in New York.
Last June, Congress passed the landmark Electric Power Industry Reform Act, which provided for the deregulation of the local power sector and the privatization of National Power. The Power Sector Assets and Liabilities Management Corp was established to oversee the privatization.
Under the privatization plan, the energy company's transmission operations will be sold ahead of its power generation assets. Government officials have repeatedly said they hope to begin the sale by the end of March, with the sales of the generation assets slated for the second and third quarter.
The transmission assets, which will be sold to a single company, are expected to be worth about $2 billion. U.K.-based National Grid Group, Electricite de France, German utility RWE AG, Kyushu Corp. and Energy Power Development Corp. of Japan have expressed interest in acquiring the company's assets.
As part of the privatization plan released by the government, some of Napocor's electricity generation assets -- mainly coal-fed and hydroelectric power stations -- have been grouped into four separate generation companies.
The first, Luzon Calaca, combines capacity of 1,355 megawatts, with the 600-megawatt Calaca coal-fed plant, the 105-megawatt bunker fuel-fed Pinamucan and the 650-megawatt Rizal thermal plant.
The second, Luzon Masinloc, comprises the 600-megawatt coal-fired plant in Zambales.
The third, Luzon Angat, comprises the 245-megawatt Angat hydroelectric plant, the 100-megawatt Pantabangan hydroelectric station and the 75-megawatt Ambuklao dam.
And the fourth, Luzon Magat, consists of the 360-megawatt Magat hydroelectric plant and the 22-megawatt Benguet hydroelectric plant.
Geothermal facilities, small hydroelectric plants and small power generators running on diesel and fuel oil will be sold individually, the government said.
American energy-company Miran has indicated an interest in acquiring several of the generation assets, in addition to company's stake in six power plants in the Philippines. Malaysian utility company Tenaga Nasional Berhad has also already expressed interest in bidding for the generation assets.
At the same time, the company, through Napocor's International Finance Trust, is in the process of launching a $500 million bond, with a seven- to 10-year maturity, market sources said, with the deal expected to be priced Friday.
The company had wanted Bear Stearns to handle the deal, but the Sept. 11 terrorist attacks postponed the process.
(Reported by Sonia Kolesnikov, UPI Business Correspondent)
