Power retailer Manila Electric Co. (Meralco) is seeking clarification from Batangas Electric Cooperative 2 (Batelec 2) regarding its unsolicited offer for a joint venture.
Arnel Paciano Casanova, Meralco’s senior vice president and chief external and government affairs officer, said the company submitted an unsolicited proposal to Batelec 2 in August of last year, but the cooperative is now considering a possible bidding process and has opened a “data room” for interested bidders.
“It’s basically a suggested proposal at that time. Now, they have opened a data room because there’s another entity, Primelectric, that is also interested. So, they opened a data room for all interested parties to gain access to their information,” Casanova said.
Primelectric Holdings Inc. is a subsidiary of Prime Infrastructure Capital Inc. of the Razon group.
Casanova said Meralco sent a letter to Batelec 2 a few weeks ago to clarify the selection process, timelines for submission and evaluation criteria, among other details.
Meralco also asked the electric cooperative how its unsolicited proposal would be treated.
“So that’s exactly the questions that we’re asking. So how will the selection be done? Will our unsolicited proposal be respected and then will they have it challenged or will they come up with an open bidding for selection? So those are the queries,” he said. Alena Mae S. Flores
Meralco has proposed a joint venture with Batelec 2 through a conversion of the electric cooperative to a stock corporation.
“So, we’ll basically infuse capital through the equity by buying the shares of the stock corporation,” Casanova said.
He said under the Electric Power Industry Reform Act of 2001, electric cooperatives are allowed to convert into stock corporations.
Casanova said they are also interested in a possible joint venture with Batelec 1 but are waiting for clarity from Batelec 2 “because this is the first time that such kind of proposal has been made.”
“So basically we’re empowering the electric cooperative by infusing capital and technology in our technical capability,” he said.
Residents of Batangas have been clamoring for Meralco to take over the operations of the electric cooperatives in the area due to frequent power outages.
Meralco, the country’s biggest power retailer, also co-manages Pampanga Electric Cooperative II, which entered an investment management contract (IMC) with Comstech Integration Alliance Inc., with Meralco as its technical partner, in 2014.
