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East Asia Power Resources Corporation (PWR) was established in 1975 as a mining company under the name Olecram Mining Corporation. It ceased commercial operations as a mining firm after a decade and changed its corporate name to Northwest Holdings & Resources Corporation in 1992. Consequently, the Company changed its primary purpose from mining to holdings. Again in 1996, the Company's Board of Directors approved the change of its corporate name to East Asia Power Resources Corporation.
PWR is now known as one of the country's independent power producers. It operates power generation facilities in Metro Manila, Bataan, Cebu and Mactan Island. It also has interests in a 24 MW coal-fired power plant in Jiangsu Province in the People's Republic of China.
In addition to its power plant operations, the Company owns 100% of East Asia Power Services, Inc. which offers planning, construction, operation and maintenance consultancy services to other prospective and established power generating facilities.
PWR has also ventured into the transmission and distribution sub-industries of the power sector through the incorporation of a wholly-owned subsidiary, East Asia Transmission and Distribution Corporation.
*Source: SEC Form 17-A
Manila Times columnist discussing PWR.
http://www.manilatimes.net/national/200 ... bus14.html
By Rene Martel
COULD an impasse over debt restructuring between a major bank and a power company possibly cause a dent in utility giant Meralco’s plans to shore up peak power requirements?
That’s a question been asked in industry circles after the Philippine National Bank froze the operating bank accounts it held of East Asia Diesel Power Corp. (EADRO) and Druacom Mobile Power Corp. (DMPC)—both operating under the banner of holding company East Asia Power—and causing the two power suppliers to switch off its four diesel powered barges moored in Manila Bay.
Furthermore, as the barges—which have a combined capacity of 243 megawatts—remain idle East Asia Power has filed a petition with the Malabon Regional Trial Court for corporate rehabilitation.
After a change of ownership in July 2006 East Asia Power intended to fire up its engines and provide for the key peaking power requirements of Meralco from its strategic location close to the Meralco grid.
EADPC/DMPC can directly connect to the Meralco power grid which results in less transmission loss. The power supply agreement (PSA) with Meralco ended December 25, 2006, but if as a result of the ongoing problems Meralco does not renew the PSA, EADPC/DMPC can still sell power directly but will require a permit from Meralco to use its transmission lines since there is no nearby Transco power lines.
In October—after EADPC received from PNB (acting in behalf of lenders) notice of default, and PNB sent notice for failure to remit minimum quarterly interest payment of P7.5 million due September 30—discussions with PNB commenced as the new management polished up its financial forecasts for submission to the banks. The discussions were supposed to have reached a consensual restructuring arrangement for the indebted companies.
However, PNB, acting through their associated PNB Trust Banking Group division, decided not to wait for the new plan and froze all the operating bank accounts of EADPC and DMPC at the end of October 2006 without notice to the involved parties.
The banks also started distributing the cash from the said accounts amounting to approximately P400 million to PNB and other lenders.
East Asia Power had to dig into its own financial resources to provide P80 million to the two units to continue the full complement of staffing and to maintain the barges in working order.
As a result of what the power company sees as PNB’s arbitrary action, EADPC and DMPC were left with no choice but to file for protection from further action by its lenders, through its petition for rehabilitation lodged in December 2006.
A sorry human aspect of this situation is that more than 140 employees in Navotas are now in danger of losing their jobs as the two companies operating cash has been taken buy the banks.
There is also deep concern on the part of East Asia Power over talk that PNB allegedly sold all its interest in the loans to a special purpose fund.
If EADPC/DMPC rehabilitation is not approved, they will have to go on a fire sale and liquidate the assets at an estimated P100-P150 million which will not cover their debts of close to P6 billion. So everybody, and that includes PNB, are destined to become big time losers.
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