First Gen eyes German group's stake in plant

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Posted: 3:23 AM | May 11, 2006

Inquirer

POWER producer First Gen Corp. is eyeing the 38-percent stake of German firm STEAG AG in a 210-megawatt coal-fired power plant in Misamis Oriental province in Mindanao that is expected to be auctioned early next year, vice chairman and chief executive Peter Garrucho said Wednesday.

Garrucho told stockholders at their annual meeting that he had expressed First Gen's intention to acquire the STEAG stake to STEAG officials here and in Germany.

"We understand from them that they would activate the sale of their 38-percent stake once the plant is completed by the end of the year," he said. "We indicated that we'll be very interested in talking to them about that."

Noting that some foreign power firms, such as Edison Mission, Intergen and El Paso, had sold their Philippine assets over the past three years, Garruco said First Gen could expand its business by bidding or negotiating for stakes in power generation companies held by private companies.

As with the STEAG stake in the Mindanao coal-fired power plant, he said First Gen would "continue to search and negotiate for such stakes."

STEAG has expressed its intention to let go of 38 percent out of the 89-percent stake it holds in the Mindanao plant, which is still being constructed.

Discussions with interested parties are unlikely to take place until the power plant starts commercial operation, scheduled for January.

Local firm State Investment Trust Inc. also owns part of the Mindanao plant.

Mindanao power supply is considered dangerously close to crisis levels. Abigail L. Ho, with INQ7.net