SPC Power drops plan to acquire 3 power barges
Korea-backed SPC Power Corp. will no longer pursue its plan to purchase the three power barges auctioned off by the state-owned Power Sector Assets and Liabilities Management Corp. (PSALM) late last year.
SPC Power is a joint venture between Korea Power Corp. (Kepco) Philippines Inc. (Kephilco) and SPC Power Corp.
According to SPC Power, the power barges have suffered severe damages from Super Typhoon Yolanda which rendered the assets structurally unfit to run.
“This is in connection with the bidding conducted by the PSALM on Oct. 30, 2013 for the sale of the 32 megawatt Power Barge (PB) 101 and 32-MW PB 102 located in Obrero, Iloilo City and 32-MW PB 103 located in Estancia, Iloilo as one package which was won by SPC Island Power Corp. (SIPC), a wholly-owned subsidiary of SPC Power Corp. “SPC Power said in its disclosure to the Philippine Stock Exchange.
“Before closing date and turnover of these PBs to SIPC, however, PB 103 was severely damaged by the strike of Super Typhoon Yolanda on Nov. 8, 2013,” it added.
The power firm said the damage compromised the structural integrity of the generators and auxillaries of the PB 103 and significantly affected the reasons underlying SIPC’s bid for the PBs.
“In view thereof, and inasmuch as the delivery of the PBs to SIPC could not be predicted, SIPC sent PSALM on March 13, 2014 a notice terminating the related asset purchase agreement (APA) citing the clear provisions of Article 4.08 and 12.01 of the APA,” it said.
SPC said PSALM will review the termination notice and will accordingly advise SIPC of its further action or decision on the notice.
As of May 22, 2014, the company said PSALM has not yet informed SIPC of its decision.
“As far as SIPC is concerned, the APA has been effectively terminated,” it said.
Despite dropping its offer to buy the three power barges, SPC Power earlier this week exercised its “right to top” the highest bidder for the 153.1-MW Naga power facility in Cebu.
The company said the move shows its support to the government’s privatization efforts.
SPC made the P1.143-billion payment to PSALM, the government corporation tasked to privatize state-owned power assets.
“With the payment, we expect PSALM to sign and execute, as the counter party, the asset purchase agreement and the land lease agreement attached in the bidding package which SPC had already prescribed,” SPC said in its letter to PSALM.
PSALM president Emmanuel Ledesma Jr. has issued a notice on April 27 that Therma Power Visayas Inc. of the Aboitiz Group is the winning bidder for the Naga facility.