A $30 million negotiated deal paved the way for the divestment of two power barges in Mindanao which the Power Sector Assets and Liabilities Management Corporation (PSALM) sealed with Aboitiz Power Corporation.

Publicly-listed AP disclosed to the Philippine Stock Exchange (PSE) that it offered $16 million for the acquisition of Power Barge (PB) 117 in Agusan del Norte; and $14 million for PB 118 in Davao del Norte. The two diesel plants have generating capacity of 100 megawatts each.

“Aboitiz Power has successfully concluded a negotiated bid for the acquisition from PSALM of two barge-mounted diesel powered generation plants,” the company noted.

The Aboitiz firm lined up its wholly-owned subsidiaries - Therma Mobile Inc. and Therma Marine Inc..- as corporate vehicles for the acquisitions of PB 117 and 118, respectively.

At least 40-percent of the acquisition price will be settled at closing date which is 270 days from the contract award; while the balance will be amortized over seven years.

“Closing of the transaction is dependent upon the fulfillment of certain conditions precedent by AP and PSALM which must occur not later than 270 days from the issuance of the letter of award by PSALM,” the Aboitiz firm noted.

The notice of award is anticipated to be issued 10 days from August 3, being the reference date.

The acquisition of the plants is expected to shore up the company’s supply portfolio in Mindanao, especially in the region’s economic growth corridors, such as Davao.

PSALM auctioned the power barges to interested parties. But having failed twice in the exercise, it opted to enter into negotiated arrangements as allowed under the law.

Upon turnover of the power barges, AP said its attributable generating capacity will then reach 1,240 megawatts.

Apart from this acquisition, AP is also pursuing generation portfolio build-up in Mindanao via the proposed Sibulan and Tamugan hydro power projects.