Transco to name privatization adviser soon
Business World, Monday, January 03, 2005
State-run National Transmission Corp. (Transco) will award this month the contract to evaluate its transmission assets in preparation for privatization. Transco President and Chief Executive Alan T. Ortiz told reporters last week the final list of bidders include foreign appraisers.
"We can name the financial adviser by January. There were three foreign firms that were left," he said. The government is set to privatize the operations of Transco, the spin-off company which handles the transmission functions of the National Power Corp. (Napocor).
Last year, Transco announced it is looking for a third party to evaluate its assets which were earlier appraised to be as high as $3 billion from $2 billion in 1996.
The contract involves appraising Transco's transmission assets to assess how much they are worth in preparation for privatization. The Power Sector Assets and Liabilities Management Corp. (PSALM) last week announced it expects to privatize Transco by the first quarter of next year despite earlier targeting its sale before yearend. PSALM earlier said it was reviewing whether the yearend target for the privatization of Transco is still doable.
PSALM is the government agency tasked to privatize state-owned generation, transmission and related assets as mandated by the Electric Power Industry Reform Act (EPIRA).
PSALM President Raphael Perpetuo M. Lotilla said some four to five groups remain keen to operate the country's high voltage transmission system.
Mr. Lotilla said PSALM is currently attending to other issues such as the government's absorption of Napocor's PhP200 million debts by December 31, 2004. The government expects to raise $2 billion from the Transco sale. The amount will be used to pay off part of Napocor's debts.
The winning concessionaire will be allowed to operate Transco for 25 years, renewable for another 25 subject to performance conditions. The government will require at least 25% of the enterprise value of the business as upfront payment upon closing of the transaction.
Under EPIRA, Transco's operations will be given to the private sector. However, ownership of the company and its transmission assets will remain with the government.
State-run National Transmission Corp. (Transco) will award this month the contract to evaluate its transmission assets in preparation for privatization. Transco President and Chief Executive Alan T. Ortiz told reporters last week the final list of bidders include foreign appraisers.
"We can name the financial adviser by January. There were three foreign firms that were left," he said. The government is set to privatize the operations of Transco, the spin-off company which handles the transmission functions of the National Power Corp. (Napocor).
Last year, Transco announced it is looking for a third party to evaluate its assets which were earlier appraised to be as high as $3 billion from $2 billion in 1996.
The contract involves appraising Transco's transmission assets to assess how much they are worth in preparation for privatization. The Power Sector Assets and Liabilities Management Corp. (PSALM) last week announced it expects to privatize Transco by the first quarter of next year despite earlier targeting its sale before yearend. PSALM earlier said it was reviewing whether the yearend target for the privatization of Transco is still doable.
PSALM is the government agency tasked to privatize state-owned generation, transmission and related assets as mandated by the Electric Power Industry Reform Act (EPIRA).
PSALM President Raphael Perpetuo M. Lotilla said some four to five groups remain keen to operate the country's high voltage transmission system.
Mr. Lotilla said PSALM is currently attending to other issues such as the government's absorption of Napocor's PhP200 million debts by December 31, 2004. The government expects to raise $2 billion from the Transco sale. The amount will be used to pay off part of Napocor's debts.
The winning concessionaire will be allowed to operate Transco for 25 years, renewable for another 25 subject to performance conditions. The government will require at least 25% of the enterprise value of the business as upfront payment upon closing of the transaction.
Under EPIRA, Transco's operations will be given to the private sector. However, ownership of the company and its transmission assets will remain with the government.
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