Petron Corp. acquired the 140-megawatt solid fuel power plant of SMC PowerGen Inc. in Bataan province for P20.029 billon.
“The purchase of the power plant would lower the power and steam costs of the Petron Bataan Refinery,” the oil giant said in a disclosure to the stock exchange.
Petron owns the 180,000-barrel-per day refinery in Bataan.
“The consideration was negotiated and agreed upon based on the extent of power plant assets,” the company said.
Petron paid SMC PowerGen P15.966 billion on Dec. 23, with the remaining P4.06 billion to be settled on or before July 31, 2017.
“The funds for the purchase of the power plant are from internally generated funds and through credit facilities secured by the company to fund the purchase of the power plant,” the company said.
SMC Power Gen used the power plant for the production of power and steam, while Petron intends to devote the power plant for the same purpose.
Conglomerate San Miguel Corp. owns both SMC Power Gen and Petron.
Petron’s executive committee previously granted authority to the company to negotiate, enter into and conclude with SMC PowerGen the relevant definitive agreements “for the purchase and acquisition” of the power plant “under such terms and conditions that the management may deem proper.”
“The executive committee likewise authorized the company to secure and avail of credit facility agreements to fund the proposed acquisition of the power plant,” Petron said.
The 140-MW power plant started commercial operations in May 2013 and availed of the income tax holiday from May to September 2013.
Petron invested $2 billion to further upgrade its Bataan Refinery and make it at par with the most advanced refineries in the region.
Dubbed the Refinery Master Plan – 2, Petron can now produce more higher-value products such as gasoline and petrochemicals while eliminating negative margin fuel oil.
Petron is the largest oil refining and marketing company in the Philippines and is a leading player in the Malaysian market. It has a combined refining capacity of 268,000 barrel-per-day and produces a full range of world-class fuels and petrochemicals.
Petron has more than 2,800 service stations where it retails gasoline and diesel.
