Government-run Power Sector Assets and Liabilities Management Corporation (PSALM) has approved the request of Fort Pilar Energy, Inc. to assign its right to purchase the 650-megawatt Malaya Thermal Power Plant (MTPP) to subsidiary Belgrove Power Corporation.
Based on the terms of the MTPP’s privatization, Fort Pilar Energy — the winning bidder — may assign its right to purchase to its wholly-owned subsidiary. The right of assignment is provided under the Asset Purchase Agreement (APA), a document approved and disseminated to all parties as part of the privatization activity.
“PSALM considered the request for assignment only after ascertaining the Assignee’s juridical existence and financial capability through a rigorous evaluation process and upon obtaining FPEI’s acceptance of the additional conditions that it will become solidarily liable with Belgrove for any and all obligations of Belgrove as buyer under the APA,” PSALM President and Chief Executive Officer Irene Besido-Garcia said in a statement.
The next step in the privatization process will be the filing of required documents with the Philippine Competition Commission (PCC) for the issuance of a Certificate of Non-Coverage. This transaction is not part of the rule requiring compulsory notification on mergers and acquisition, but PSALM said it will have to secure the document.
PSALM said it will proceed with the issuance of Certificate of Effectivity to Belgrove within two business days upon receiving the clearance from PCC.
PSALM already had several attempts to privatize the MTPP for the last two years in order to pay for the government-owned firm’s obligations, which it inherited from the National Power Corporation under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA).