Business and Economy
Court stops PSALM from terminating IPPA contract with San Miguel power unit
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MANILA – The Regional Trial Court (RTC) of Mandaluyong City has stopped the Power Sector Assets and Liabilities Management Corp. (PSALM) from terminating its Ilijan independent power producers administrator (IPPA) contract with South Premiere Power Corp. (SPPC).
In a disclosure with the Philippine Stock Exchange Tuesday, San Miguel Corp. said “we advise that the Regional Trial Court of Mandaluyong City, Branch 208, issued on Sept 28, 2015 an order granting the preliminary injunction in favor of SPPC, enjoining the PSALM from further proceeding with the termination of the IPPA agreement between SPPC and PSALM while the main case is pending.”
San Miguel also said SPPC posted an additional bond of Php 500,000 as ordered by the Court. It earlier posted a bond of Php 1 million.
The corporation also said the hearing for the main case was set on Oct. 22, 2015 at 1:30 p.m.
The IPPA agreement grants SPPC the rights to whom to sell the power output of the 1,200-megawatt (MW) Ilijan natural gas facility. PSALM held the auction for its bidding, which San Miguel won in 2010 through an USD 870-million bid.
SPPC filed the legal complaint on Sept. 7 to declare PSALM’s termination notice null as it alleged that the subsidiary has not settled a debt of Php 6.46 billion for generation payments.
PSALM advised SPPC on Sept. 4 it will terminate IPPA contract.
However, the Mandaluyong RTC has issued a 72-hour temporary restraining order (TRO) on Sept. 8 for PSALM’s decision to terminate the deal.
The TRO was extended by the Mandaluyong RTC on Sept. 15 — until Sept 28.
It also stops PSALM from exercising its IPPA rights to dispose the payment it had received from SPPC’s USD 60-million performance bond with ANZ, pursue collection of supposed unpaid generation payments, VAT on generation payments for Manila Electric Company (Meralco) nominations under the Meralco-NAPOCOR power supply contracts to Sunpower and Econzone requirements and any interest imposed by PSALM on such amounts.
SPPC is a subsidiary of San Miguel Corp. through its power-arm SMC Global Power Holdings Corp.
