Trans-Asia taps SRO funds for acquisition of power barges

TRANS-ASIA Oil and Energy Corp. is using the remaining proceeds of its stock rights offerings to replenish funds used to buy three power barges (PB) from the state.

The power arm of listed Phinma Corp. said in a disclosure to the Philippine Stock Exchange (PSE) that its executives had agreed to use the remaining balance of the 2007, 2011 and 2012 SRO proceeds amounting to P373.4 million for the purchase of PBs 101, 102, and 103 from National Power Corp. (Napocor).

Trans-Asia said the SRO funds were earmarked for, among others, power project opportunities and investments in privatization of Napocor assets through Power Sector Assets and Liabilities Management Corp. (PSALM). Also a state-owned firm, PSALM manages Napocor’s asset privatization and pays off its debts.

“The use of the SRO proceeds frees up the company’s internally generated cash to fund future projects,” Trans-Asia said.

With a combined capacity of 96 megawatts (MW), the power barges were officially turned over to Trans-Asia on July 08, 2015. The PSE-listed energy company said in an earlier disclosure that it had paid the purchase price of P420 million to PSALM and both parties had delivered their respective closing documents.

Trans-Asia was declared second-highest bidder for the three power assets during the auction in October 30, 2013 with an offer of P370.52 million. SPC Island Power was the highest bidder with an offer of P545.52 million.

PSALM conducted the bidding for the sale of the 32-MW Power Barge 101 and 32-MW PB 102 located in Obrero, Iloilo City and 32-MW PB 103, which was located in Estancia, Iloilo at the time of the auction. PB 103 is now in Subic town, Zambales.

In November of that same year, PB 103 suffered severe damage from typhoon Yolanda.

PB 103 was de-moored and ran aground resulting to severe damage to its hull and other equipment. PB 103 was towed to Keppel Subic Shipyard Inc., for tank cleaning and repair.

In May 2014, the company terminated its asset purchase agreement with the government due to the damage to PB 103. Since the power barges were sold as a package, the withdrawal covered all the three assets.

In December, PSALM signed a memorandum of agreement with Trans-Asia instead of holding another auction.

Apart from the three power barges, PSALM had also auctioned power barge 104 but the bidding failed after both SPC Island and Trans-Asia failed to meet the reserve price with bids of P45.89 million and P30 million, respectively.

Power barges 101 and 102 were commissioned in 1981. They are located in barrio Obrero in Iloilo City. Riza T. Olchondra