PETRON Corp., the country’s largest oil refining and marketing company, said it has executed the definitive agreements with SMC PowerGen Inc. for the reacquisition and purchase of the latter’s 140-megawatt (MW) solid fuel-fired power plant located in Petron’s Bataan Refinery.
“The purchase of the power plant would lower the power and steam costs of the Petron Bataan Refinery,” the company said in a disclosure to the Philippine Stock Exchange (PSE) on Friday.
The total consideration for the transaction was P20.03 billion, Petron said. Of this amount, P15.97 billion was paid on December 23, 2016 and the balance of P4.06 billion is due on or before July 31, 2017, the company said.
The proposal to purchase the power plant was approved by the executive committee of Petron’s Board of Directors on September 15, 2016 and confirmed by the Board of Directors on November 8, 2016.
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, Petron said.
The power plant was used by SMC PowerGen for the production of power and steam and the company intends to devote the power plant for the same purpose, Petron added.
In September 2013, SMC Global Power subsidiary SMC PowerGen acquired the 2×35 MW co-generation solid fuel fired plant of Petron in Limay, Bataan. The plant added 140 MW to the total capacity of SMC Global Power, bringing its total capacity to 2,685 MW by end-September that year.
Both SMC PowerGen and Petron Corp. are owned by conglomerate San Miguel Corp.