Fort Pilar Energy buys Malaya plant for P3.123 B

Published May 7, 2021, 5:13 PM

by Myrna M. Velasco

Filipino firm Fort Pilar Energy Inc. emerged as the winning buyer of the 650-megawatt Malaya thermal power facility with P3.123 billion price offer – the divestment process of which was through a negotiated deal consummated on Friday (May 7).

State run Power Sector Assets and Liabilities Management Corporation (PSALM) announced that the plant’s negotiated sale was a “success”; and the tendered purchase price for the Malaya facility had been way higher than the set minimum offer price of P1.845 billion.

The winning offer of Fort Pilar Energy heftily exceeded the P2.22 billion bid of AC Energy Corporation of the Ayala group, which also showed sustained interest in the Malaya thermal facility.

PSALM President Irene Joy Besido-Garcia

PSALM President and CEO Irene Besido-Garcia expressed elation over the facility’s sale, given that this is a major asset divestment undertaking of the company under the Duterte administration.

“After several attempts to privatize Malaya thermal power plant the last two years, we are very happy to have finally received financial bids substantially above our minimum offer price,” she said.

Garcia added that “PSALM definitely needs the proceeds of this privatization activity to pay for the remaining stranded contract costs and stranded debts.”

The company chief executive emphasized that the Malaya plant “contributed to the losses of PSALM the past many years and so we really looked forward to selling it.”

On that negotiated sale process, the plant was divested on as “as is, where is” basis – and that covered the 300-megawatt unit 1 of the facility; the 350MW unit 2  as well as the underlying land of the plant’s site in Pililla, Rizal.

Following the conclusion of successful privatization, the asset-seller firm noted that “the results of the negotiation exercise will be subject to a post-qualification process to ensure that the winning negotiating party indeed met all the financial and legal requirements as indicated in the negotiation procedures.”

The asset divestment had been witnessed by representatives from the Commission on Audit (COA), Department of Finance, Department of Justice, as well as that of National Power Corporation.

Prior to the sale, the Malaya plant was being depended upon by the Luzon power system as must-run unit (MRU) that can be called on for dispatch when there is sudden tightening of supply in the grid.

But following its privatization, the discretion on the plant’s operation will now rely solely on the new owner’s preference.