Publicly-listed firm SPC Power Corporation and its affiliate-firm Intrepid Holdings Inc. (IHI) have acquired the 51 percent shareholdings of German firm STEAG GmbH in the 210-megawatt coal-fired power plant in Mindanao in a transaction valued at $52 million.

In a disclosure to the Philippine Stock Exchange (PSE), SPC Power said it purchased the 40.5 percent stake of STEAG in the coal-fired power asset while its affiliate IHI acquired 10.5 percent.

The buyer-company conveyed that the sale and purchase agreement (SPA) of the shares of the German firm in the coal plant, which is under corporate vehicle STEAG State Power Inc. (SPI), was sealed on February 10 this year.

“Subject to the terms and conditions of the SPA, seller (STEAG) shall sell its 51% interest in the outstanding capital stock of SPI to the purchasers (SPC Power and IHI) -- with SPC acquiring 40.5-percent and IHI 10.5-percent,” noted SPC Power, which is chaired by businessman Alfredo L. Henares.

It emphasized that the terms of payment for the transfer of ownership rights to the buyers SPC and IHI comprise of $33.889 million for common shares; $18.110 million worth of redeemable shares; and consideration for accrued interest on a locked box.

SPC explained that a ‘locked box interest rate’ would refer to an amount “equal to the interest, accrued on a daily basis, at a rate of 4.0-percent per annum calculated over the period starting from January 1, 2021 until and including completion, or March 31, 2022, whichever is earlier.”

The company said “the closing of the sale shall be subject to conditions precedent,” adding that “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.”

With the German firm’s exit, the other key partner in the Mindanao coal plant will be the Aboitiz group which had been SPC’s intense rival in the State-privatized Naga thermal plant in 2014.

The SPI-operated Mindanao coal plant was developed through a build-operate-transfer (BOT) arrangement with the government – and it has been state-run National Power Corporation (NPC) that served as the original counterparty to the 25-year power purchase agreement (PPA) of the facility’s generated capacity. That contractual obligation was eventually transferred to Power Sector Assets and Liabilities Management Corporation, the successor-company of NPC.

For purchaser firm-SPC, the concentration of its operations is in the Visayas; hence, this facility acquisition in Mindanao is considerably its expansion venture in the southernmost power grid of the country.

Beyond this new asset buy and its currently operating assets, SPC has also laid down plans for aggressive foray into renewable energy developments that will include solar and hydro installations with targeted technology coupling of battery energy storage systems.