LISTED AboitizPower Corp. said on Tuesday its subsidiary managed to stop for now the sale of its real estate properties in a town in Ilocos Sur province.
In a disclosure, the power arm of the Aboitiz Group said the Regional Trial Court of Tagudin town in Ilocos Sur issued a 20-day temporary restraining order (TRO) preventing the Alilem municipal government from auctioning off Luzon Hydro Corp.’s (LHC) properties.
Both parties were also ordered to submit their position papers within 10 days.
The TRO comes after AboitizPower reported last month that LHC had asked for the order, which it said aimed “to challenge the correctness of the amount assessed as real property tax (RPT) delinquency and to prevent the auction sale of the assets covered by the warrants of levy issued by the Municipal Treasurer of Alilem.”
LHC sought the enforcement of the executive orders (EOs) of President Rodrigo Duterte that reduced such a tax on property, machinery and equipment actually and directly used by independent power producers (IPPs) under build-operate-transfer (BOT) contracts, and condoning related RPT interest and penalties.
The AboitizPower unit previously received a notice of RPT delinquency from the treasurer, who sought to collect P446,029,609.26 in unpaid RPT and accrued penalties from 2002 to 2019.
Before the planned auction, the Ilocos Sur provincial government rejected LHC’s proposal to settle its RPT based on the provisions of EO 60 signed by Duterte in August.
This order allows the reduction and condonation of real property taxes and penalties assessed on power generation facilities of IPPs under BOT contracts. The reduction and condonation cover all liabilities for RPT, including any special levy accruing to the Special Education Fund for calendar year 2017 and prior years.
In a letter, the Power Sector Assets and Liabilities Management urged Alilem to reconsider the auction, in consideration of the ownership rights and interest of the government over these properties.
On August 13, Duterte issued EO 88, which reiterated the terms under EO 60 and confirming the reduction of IPPs’ RPT obligations for all years up to 2018.
The latest update on the subject has “no material impact [on] the business or operations of AboitizPower,” it said.
Incorporated in 1994, LHC owns and runs in Alilem the 70-megawatt Bakun AC run-of-river hydropower plant that was built under the government’s BOT scheme.
AboitizPower shares fell by 60 centavos or 1.72 percent to end at P34.20 apiece on Tuesday.