SPC Power Corporation and affiliate Intrepid Holdings, Inc. (IHI) have acquired German firm Steag GmbH’s 51% stake in STEAG State Power Inc. – the operator of the 210-megawatt (MW) Mindanao Coal-fired Power Plant in Villanueva, Misamis Oriental.
In a disclosure to the Philippine Stock Exchange on Friday, SPC Power said it and IHI were able to buy 40.5% and 10.5%, respectively, for $52 million (around Php2.67 billion).
“This acquisition is in line with the objective of SPC to support growth and address the country’s need for reliable, affordable, and sustainable power supply,” the power generation firm said.
The terms of payment comprised $33.889 million for common shares, $18.110 million for redeemable shares, and the interest accrued on the two shares at “Locked Box Interest Rate.”
“Locked Box Interest Rate means an amount equal to the interest, accrued on a daily basis, at a rate of four percent per annum calculated over the period starting from 01 January 2021 until (and including) Completion or 31 March 2022, whichever is earlier,” SPC Power further said.
With the acquisition of the Mindanao coal plant, SPC and IHI will be partnering with Aboitiz Power Corporation, which owns 34% of the plant. AboitizPower was SPC Power’s rival in the bidding for the 153MW Naga Power Plant in Cebu in 2014.
The Mindanao coal plant was developed through a build-operate-transfer arrangement with the government in 2006. The National Power Corporation (NAPOCOR) served as the original counterparty to the facility’s 25-year power purchase agreement (PPA). The PPA was then passed on to the Power Sector Assets and Liabilities Management Corporation, NAPOCOR’s successor company under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA).
Trading of SPC Power’s shares in the PSE was suspended on Monday following the disclosure.
“After a review of the disclosure submitted by the company, the Exchange deems that the foregoing transaction is covered by the Rule on Disclosure for Substantial Acquisitions and Reverse Takeovers under Section 5, Article VII of the Consolidated Listing and Disclosure Rules of the Exchange, as amended, [or the Substantial Acquisition Rule],” the PSE said in its notice.
SPC Power recently disclosed that it appealed the Php4 million fine imposed by the Energy Regulatory Commission for the excessive forced outages of the Panay Diesel Power Plant.
Photo from AboitizPower website.