Press Release
August 1, 2006


Senate Minority Leader Aquilino Nene Q. Pimentel, Jr. (PDP-Laban) today urged Malacañang and energy authorities to purge the privatization of the power sector of bogus industry players by immediately terminating the contract of the YNN-Pacific-Ranhill Berhad for the purchase of the 600-megawatt power plant in Masinloc, Zambales.

Pimentel called for the rejection of the request by YNN-Ranhill Berhad for another extension of the deadline for settling the $227 million downpayment to September 30. The last deadline expired June 30.

He said the final cancellation of the purchase contract by the Power Assets and Liabilities Management (PSALM) Corp. will spare electricity consumers of the threat of higher power rates that YNN Pacific and its Malaysian partner, Ranhill Berhad, are expected to demand in order to recoup the unusually high cost incurred in acquiring the coal-fired plant.

YNN Pacific, headed by businessman Sunny Sun, was awarded the contract in 2004 after it offered to buy the Masinloc plant for $561 million. PSALM put a tag price of $388 million for the power plant. The second highest bidder, the Lopez-owned First Generation Holdings, offered a bid price of only $280 million.

Pimentel said that after PSALM confiscated YNN Pacifics performance bond of $14 million when the June 30 payment deadline lapsed, its next logical course of action was to invalidate the asset purchase agreement and conduct a rebidding.

If there is a new bidder, PSALM should subject Masinloc plant to another bidding. And the bidding should be public and transparent. Otherwise, PSALM officials should be charged for being remiss in the performance of their duties, he said.

Pimentel noted that after the June 30 payment deadline expired, PSALM gave YNN Pacific another 40 days within which to pay its financial obligation in the hope that the entry of Ranhill Berhad will enable the buyer to raise the necessary funds for the transaction.

However, he said the entry of Ranhill Berhad as YNN Pacifics new investment partner constitutes a breach of the asset purchase agreement and therefore should be disallowed.

Pimentel pointed out that the asset purchase agreement specifically prohibits YNN Pacific from transferring its right of ownership over the Masinloc plant to another entity. Therefore, he said, Ranhill has no right to buy out YNN Pacific unless it is a result of a new bidding.

Ranhill Berhad reportedly bought majority ownership of YNN Pacific for $8 million (about P420 million).

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