The announcement that Credit Suisse had won the sole lead for a deal that had the potential of reaching upwards of $750 to $1 billion was seen as a major coup in what at the time was a very sluggish market.
Unfortunately the jubilation would be short lived. Earlier this month the announcement that parent company Mirant, which is based in Atlanta, was looking to sell the Philippine asset all but ended any possibility of a bond deal for the time being as the parent will likely not be looking to increase its gearing prior to the sale.
Furthermore, the company completed a loan earlier this month that has addressed its near term refinancing requirements.
Mirant recently closed an upsized $700 million six-year loan into general syndication with sixteen banks participating: ABN AMRO, Bank of Tokyo-Mitsubishi UFJ, BDO Capital, BNP Paribas, BPI Capital, Calyon, Credit Suisse, Fortis Bank, HSBC, Hypovereinsbank, ING, JPMorgan, Natexis Banques Populaires, Royal Bank of Scotland, Sumitomo Mitsui Banking Corp and WestLB.
The loan will be used to buy back shares with the balance going to the refinancing of project finance loans worth $450 million. Those loans are currently held by Mirant Sual and Mirant Pagbilao û both Mirant subsidiaries.
Instead, Mirant is expected to sell the assets, with the anticipation that any prospective buyer will leverage off of the company's strong cashflows to fund the purchase.
The sale is estimated to be worth upwards of $2.5 billion to $3 billion, with any potential leveraged buyout in the range of $1.5 billion to $2 billion.
In May, parent Mirant Corp announced a substantial increase in net income for the first quarter. Net income jumped to $467 million from only $11 million for the same period of 2004. As of end-March, Mirant had cash and cash equivalents of $1.73 billion.
Mirant Philippines accounts for just under 40% of its parentÆs Ebitda.
Mirant was the first company that responded to the Philippinnes governmentÆs call for private sector assistance in developing the countryÆs energy sector. Mirant Philippines now owns and operates a number of the largest power plants in the country; these include a 1200MW Sual coal-fired plant in Pangasinan and a 700MW Pagbilao coal-fired generation facility in Quezon. In terms of total capacity Mirant generates 2,200MW.