02 Dec 2005
The Power Sector Assets and Liabilities Management Corporation (PSALM) has asked YNN Pacific Consortium to pay on or before March 31, 2006 the $222-million upfront payment for the 600-megawatt Masinloc coal-fired power plant in Zambales.
Under the asset purchase agreement, PSALM must set YNN’s deadline for the remittance of the upfront payment and closing deliverables after PSALM completes all of its conditions precedent, which include the consent of creditors that include the World Bank, Asian Development Bank and the Japan Bank for International Cooperation.
The asset purchase agreement required PSALM to complete all conditions precedent by December 2. Failure to complete would have allowed YNN to walk away from the deal after 30 days without the risk of forfeiting its $11-million performance bond. PSALM issued its closing deliverables last November 25.
PSALM required YNN to extend the effectivity of its $11-million performance bond which will expire in April 2006. YNN was also asked to execute an undertaking stipulating that the consortium would deliver in mid-January 2006 an amended performance bond which would be effective until August 2006. If YNN fails to deliver the amended bond, PSALM can forfeit the original bond.
“We believe we have adopted the necessary measures to protect the interests of the Philippine government consistent with the existing provisions of our asset purchase agreement,” said PSALM president Nieves L. Osorio.
Strategic Communications and Partnership Division |