YNN investor sets condition for performance bond
The Philippine Star
05/12/2006
Malaysian firm Ranhill Power Berhad, the newest member of the YNN Pacific Consortium that won in the bidding for the Masinloc power plant, wants a supply contract with Manila Electric Co. (Meralco) before the revised $14-million performance bond becomes valid.
Industry sources said Ranhill reportedly asked for such a pre-condition or else the performance bond would not be raised to $14 million from previous $11.2 million as agreed upon with the Power Sector Assets and Liabilities Management Corp. (PSALM).
PSALM vice president Froilan A. Tampinco, on the other hand, said Ranhill submitted the amended performance bond but it has to go through the approval of the PSALM board.
"It has to go through the approval of the PSALM board, and we’re setting a meeting on the week of May 22nd to 26th," he said. He would not directly confirm what were the conditions tied to the amended letter of credit that was submitted by Ranhill, but indicated that "these are being reviewed by our lawyers that would trigger acceptance or rejection of the bond."
It was not known if PSALM would give in to such request as Meralco is still in the process of finalizing its own transition supply contract (TSC) with Napocor. Napocor owns and operates Masinloc before it was auctioned off and sold to YNN Pacific.
"YNN-Ranhill submitted last April 28 their amended performance bond of $14 million whose effectivity is good until December 2006," Tampinco said.
In end 2005, PSALM asked YNN, the winning bidder of Masinloc, to deliver by mid-January 2006 the $11.14- million performance bond which would be effective until August 2006.
YNN complied with the requirement in January but with the entry of the Malaysian firm and a new payment deadline set, the consortium was given a higher performance bond of $14 million.
The performance bond serves as a guarantee that the consortium would not renege on its obligation to pay the upfront payment of $227 million on or before the June 30 deadline (from the original March 31) and later on settle the balance of $334.7 million to complete its winning bid of $561.7 million for the Masinloc facility.
"We believe that the additional $3 million performance bond is enough indication of YNN-Ranhill’s seriousness to push through with the deal. It is also sufficient protection for government’s interests in the next three months," PSALM president Nieves Osorio said earlier.
According to Osorio, the government has decided to extend the delivery of the upfront payment following a meeting with YNN officials and Ranhill president and chief executive officer Tan Sri Hamdan Mohamad.
05/12/2006
Malaysian firm Ranhill Power Berhad, the newest member of the YNN Pacific Consortium that won in the bidding for the Masinloc power plant, wants a supply contract with Manila Electric Co. (Meralco) before the revised $14-million performance bond becomes valid.
Industry sources said Ranhill reportedly asked for such a pre-condition or else the performance bond would not be raised to $14 million from previous $11.2 million as agreed upon with the Power Sector Assets and Liabilities Management Corp. (PSALM).
PSALM vice president Froilan A. Tampinco, on the other hand, said Ranhill submitted the amended performance bond but it has to go through the approval of the PSALM board.
"It has to go through the approval of the PSALM board, and we’re setting a meeting on the week of May 22nd to 26th," he said. He would not directly confirm what were the conditions tied to the amended letter of credit that was submitted by Ranhill, but indicated that "these are being reviewed by our lawyers that would trigger acceptance or rejection of the bond."
It was not known if PSALM would give in to such request as Meralco is still in the process of finalizing its own transition supply contract (TSC) with Napocor. Napocor owns and operates Masinloc before it was auctioned off and sold to YNN Pacific.
"YNN-Ranhill submitted last April 28 their amended performance bond of $14 million whose effectivity is good until December 2006," Tampinco said.
In end 2005, PSALM asked YNN, the winning bidder of Masinloc, to deliver by mid-January 2006 the $11.14- million performance bond which would be effective until August 2006.
YNN complied with the requirement in January but with the entry of the Malaysian firm and a new payment deadline set, the consortium was given a higher performance bond of $14 million.
The performance bond serves as a guarantee that the consortium would not renege on its obligation to pay the upfront payment of $227 million on or before the June 30 deadline (from the original March 31) and later on settle the balance of $334.7 million to complete its winning bid of $561.7 million for the Masinloc facility.
"We believe that the additional $3 million performance bond is enough indication of YNN-Ranhill’s seriousness to push through with the deal. It is also sufficient protection for government’s interests in the next three months," PSALM president Nieves Osorio said earlier.
According to Osorio, the government has decided to extend the delivery of the upfront payment following a meeting with YNN officials and Ranhill president and chief executive officer Tan Sri Hamdan Mohamad.
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