Susan Gordon, Business Reporter

Milverton Reynolds (centre), managing director of the Development Bank of Jamaica (DBJ), signs the agreement giving the Jamaican Government's consent to the transfer of Mirant Corporation's 80 per cent stake in the Jamaica Public Service Company to the Japanese firm, Marubeni. At left is Tomofumi Fukuda, president of Marubeni Caribbean Power Holdings, Inc., signs the Letter of Agreement - Contributed

Marubeni Caribbean Power Holdings has settled on purchasing Mirant Corporation's total equity shares in the Caribbean for half the price that was announced in April by the American power company that once had controlling interest in the Jamaica Public Service Company(JPS).

Mirant had indicated that it planned to sell all its Caribbean equity, including the JPS for US$1.082 billion ($74.1 billion), but Marubeni Caribbean Holdings, a subsidiary of the Japanese power company, Marubeni Corporation, in a statement last week said it paid US$580 million ($39. 7 billion) for the total package.

Mirant Caribbean Holdings assets comprised a 55.4 per cent equity interest in Grand Bahama Public Company in the Bahamas, a 39 per cent equity interest in PowerGen, an independent power producer that supplies 80 per cent of the total electricity demand in Trinidad & Tobago, a 25.5 per cent equity interest in Curacao Utilities Company and 80 per cent equity stake in the JPS.

The sale and purchase agreements were finalised on April 18, Marubeni said in the statement. The Japanese company was awarded Mirant's equity shares in the Caribbean through competitive bidding that was administered by Mirant International Investments.

Funding

Mizuho Corporate Bank was the financial adviser to Marubeni, which said the total purchase price would be funded by its own equity and debt facilities raised from banks.

Wednesday Business was unable to get a quotation from Marubeni on how much it had acquired Mirant's 80 per cent equity stake in JPS for.

"It's not publicly available information," spokesperson for Marubeni Caribbean Power Holdings, Saira Joshi said in response to Wednesday Business queries.

JPS represented 71 per cent of the net generation capacity or megawatt of the assets placed on sale. The total net generating capacity of MCH's power and light distribution assets in the Caribbean is 1,150 megawatt, with JPS accounting for 817.75 megawatts, inclusive of the Independent Power Providers' portion (IPP).

But the US$580 million sale price from which Mirant netted US$553 million, according to its second quarter financial report, is still a far pitch below the US$800 million sale value Finance and Planning Minister, Dr. Omar Davies had placed on the stake in JPS alone.

The Government, which still owns 20 per cent of the island's sole electricity provider, had sold the 80 per cent stake to Mirant in 2001 for US$201million.

Marubeni said it envisioned "Overseas IPP Investment as one of the core growing business fields and has been active in growing strong global IPP asset portfolio."

The company said the transaction would enable it to increase its IPP presence and encompass transmission and distribution through integrated utilities in the region.

"Since 2002, we have accumulated our knowledge base in retail and wholesale businesses and deem that it would contribute to supply approximately 600,000 households in Grand Bahama and Jamaica," stated Miss Joshi.

susan.gordon@gleanerjm.com