Phinma En­ergy sues PSALM, Ledesma

Business World - - CORPORATE NEWS - Vic­tor V. Saulon

PHINMA En­ergy Corp. on Wed­nes­day sued state-owned Power Sec­tor As­sets and Li­a­bil­i­ties Man­age­ment Corp. (PSALM) and its for­mer pres­i­dent for dam­ages re­lat­ing to the ter­mi­na­tion of an ad­min­is­tra­tion agree­ment over geo­ther­mal power plants in Leyte.

In a dis­clo­sure to the stock ex­change on Wed­nes­day, Phinma En­ergy said it had filed be­fore the Re­gional Trial Court of Makati City a com­plaint for dam­ages with prayer for a writ of pre­lim­i­nary in­junc­tion or a writ of pre­lim­i­nary manda­tory in­dus­try against PSALM and its for­mer pres­i­dent Em­manuel R. Ledesma, Jr.

It has also sought a tem­po­rary re­strain­ing or­der (TRO) against the de­fen­dants.

The case seeks to stop the ter­mi­na­tion of the deal — on grounds of ad­min­is­tra­tor’s de­fault — for the se­lec­tion and ap­point­ment of in­de­pen­dent power pro­ducer ad­min­is­tra­tors (IPPAs). The deal in­volves the “strips of en­ergy” of the Uni­fied Leyte Geo­ther­mal Power Plants (ULGPP) lo­cated in Tong­o­nan town of Leyte.

“The grant of the prayer for a TRO will re­strain PSALM from ter­mi­nat­ing the Agree­ment on the ground of Ad­min­is­tra­tor’s De­fault and pre­vent PSALM from as­sert­ing any fur­ther claim to the detri­ment of the Cor­po­ra­tion. In the event that the Court rules in fa­vor of PHINMA En­ergy, the Agree­ment may be in­val­i­dated and an award for dam­ages may be made to the Cor­po­ra­tion. An ad­verse de­ci­sion may open the Com­pany to pos­si­ble fi­nan­cial claims by PSALM,” the com­pany said.

To re­call on Nov. 7, 2013, Phinma En­ergy, then known as Tran­sAsia Oil and En­ergy De­vel­op­ment Corp., was de­clared one of the win­ning bid­ders with the right to ad­min­is­ter 40 megawatts (MW) “strips of en­ergy” from ULGP.

On Nov. 8, 2013, Ty­phoon Yolanda hit the East­ern Visayas, re­sult­ing in ex­ten­sive dam­age to the ULGPP. It was only a year later that PSALM awarded the “strips” to the win­ning bid­ders.

Phinma En­ergy said it had for­mally sought the rene­go­ti­a­tion of the agree­ment with PSALM, even propos­ing sev­eral mea­sures for re­lief. The com­pany had writ­ten PSALM to ex­press the dif­fi­cul­ties the ad­min­is­tra­tors suf­fered un­der the agree­ment.

Through its coun­sel, Phinma En­ergy said it had writ­ten a let­ter ex­er­cis­ing its right to with­draw from the agree­ment.

“Dis­cus­sions on the ter­mi­na­tion were ini­ti­ated,” it said.

The com­pany, how­ever, re­ceived a no­tice from PSALM of the ad­min­is­tra­tor de­fault, it said. The govern­ment agency also re­solved to ter­mi­nate the agree­ment and for­feit the per­for­mance bond.

Shares in Phinma En­ergy were un­changed at P1.81 each on Wed­nes­day. —

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