The Power Sector Assets and Liabilities Management Corp. (PSALM) said its board of directors approved last June 2 the issuance of the notice of award to Fort Pilar Energy Inc. for the privatization of the 650 megawatts Malaya thermal power plant and its underlying land in Pililia, Rizal.
Irene Besido-Garcia, PSALM president and chief executive officer, said the next step in the privatization is the filing of disclosure to the Philippine Competition Commission for a certificate of non-coverage, exempting it from compulsory notification on mergers and acquisition. The transaction does not breach the notification threshold.
PSALM will then proceed with the closing of the transaction and exchange of closing documents between the parties once the remittance of payment is completed.
Last month, the state-run firm declared Fort Pilar Energy as the winning negotiating party for the asset after submitting the highest offer with P3.12 billion for the asset. This is P1.28 billion than the minimum offer price set at P1.84 billion.
PSALM has been incurring an average net loss of P1.207 billion in maintaining the facility from 2010 to 2019. The plant was declared a must run unit in 2014 to provide security capacity during shortages in electricity supply and ensure system reliability of the Luzon grid.
Meanwhile, the average annual net loss of the firm if based on the years that it is running as a must run unit from 2015 to 2019 is at P556.2 million.
PSALM is mandated to privatize power related assets owned by the government. – Jed Macapagal
