In the space of a few weeks, debt-laden Mirant has divested itself of two of its major assets, which leaves its Asian business focused on the Philippines.
In its first move, the US power company sold its 33% stake in the Shajiao C power station in Guangdong. This 1980mw facility was sold for $300 million to China Resources, with ING and Morgan Stanley advising.
At the end of last week, ING again advised Mirant on the sale of a greenfield build-operate site in Korea. This was purchased by Meiya Power - a JV between the Asia Infrastructure Fund, PSEG Global and Hydro Quebec. The price was not disclosed, although it is known that Meiya financed the deal with a loan from KDB of $220 million.
This leaves Mirant with some assets in Guam - which it is thought to selling too - and its Asian jewel, the Philippines. Indeed, it seems that Mirant has now chosen to focus its Asian activities on the Philippines, where it is immensely profitable.
Mirant's Asian assets are held by Mirant Asia-Pacific and the latter had outstanding debt of $254 million. This debt placed a block on Mirant's ability to pay dividends to its parent. With the asset sales in China and Korea, this block has been removed - thanks to the paying down of debt - leaving Mirant free to remit dividends from the Philippines to the US.
Mirant has been in the Philippines since the 1980s and is credited with being one of the first to invest, and alleviate the chronic brownout situation in the Ramos era. It is the largest foreign investor in the Philippines and has power generating capacity of 3622mw via six plants, four of which it 100% owns.
Informed sources say that Mirant's Philippine operations generate net income of $200-250 million per year.
Indeed, there has long been speculation about what Mirant will do with these assets. Given its need to raise funds, there continues to be speculation about it listing the asset domestically. Should it decide to do so it would immediately become one of the Philippines biggest listed companies.