Tyrone Reid, Staff Reporter
VASWANI
MIRANT CORPORATION must get consent from the Jamaican Government to follow through on the shock announcement that plans are afoot to sell its majority stake in the Jamaica Public Service Company (JPS).
The decision, made public on Tuesday, forced the Government to put on hold preparations for a public listing of its 20 per cent share in the light and power company.
Sources close to The Gleaner said that the sales agreement signed by the Atlanta-based Mirant and the Jamaican Government prohibits Mirant from holding less than 51 per cent of its 80 per cent majority share, unless consent is sought and granted by the minority shareholder, the Government.
Speaking on behalf of the Government, on the motion for the adjournment of yesterday's sitting of the House of Representatives, Robert Pickersgill, Minister of Housing, Water, Transport and Works, confirmed that Mirant would not be able to sell JPS without its approval, based on a clause in the Share Purchase Agreement.
Prakash Vaswani, senior Jamaican director at the JPS, told The Gleaner yesterday that as far as he was aware Mirant would not be able to sell its majority shareholdings for a period of ten years.
SUBJECT TO NEGOTIATION
"And, if they wanted to do so it would be subject to negotiation with the Government, which I am not in a position to say the Government will do at this time," Mr. Vaswani said.
Mirant acquired a majority stake in JPS five years ago when it paid the Government US$183 million for 80 per cent of the company, and announced plans to spend about US$500 million over a decade to modernise and expand its electricity generating capacity.
Yesterday Opposition Leader Bruce Golding raised concerns that the sale of JPS could negatively affect the proposed Liquefied Natural Gas (LNG) with Trinidad, depending on the new owner of the power company.
During his statement, Mr. Pickersgill assured customers of JPS that their supply of electricity would not be affected.
LATE UPDATE: Yesterday William von Blasingame, president of Mirant Caribbean Holdings Ltd., said in a statement that the company's decision to give up ownership interest in its Caribbean businesses was not made lightly.
"Mirant's decision to exit the Caribbean market is not a reflection on the Jamaica Public Service Company, nor on Jamaica," he said, stressing the decision was a strategic move to enhance shareholder value by refocusing the business on domestic operations.
Relevant clauses in sale agreement
(Clause b) From and after the day immediately following the third anniversary date to, and including, the date that is the seventh anniversary of such day (the "Tenth Anniversary Date"), except to the extent otherwise consented to in writing by minority shareholders, majority shareholder shall cause Mirant not to sell, assign, lease, encumber (other than in connection with a contribution loan) or otherwise transfer any portion of its direct or indirect Ownership Interest in the company so that after giving effect to such transfer Mirant shall fail to retain ownership directly or indirectly on a fully diluted basis of at least 51 per cent of the voting stock.
(Clause c) From and after the day immediately following the tenth anniversary date, Mirant and any of its affiliates may sell, assign, lease, encumber or otherwise transfer any portion of their direct or indirect ownership Interest in the company with the prior written consent of minority shareholder, such consent not to be unreasonably withheld.
