THE provincial government under Gov. Aris Aumentado tried to pursue buyback scheme of Bohol Light Company, Inc. (BLCI), a product of acquisition of then Provincial Public Utilities Department (PPUD) by Salcon consortium under then administration of ex-governor Rene Relampagos.
This came after the provincial government received a notice of intention from the consortium to sell BLCI shares “with which the province has an existing joint venture agreement which led to the creation and operation of BLCI. The said notice is dated April 20, 2024 which is received by the capitol on April 30, 2024, Gov. Aris Aumentado said in his letter to then Vice-Gov. Victor Balite and Sangguniang Panlalawigan.
The Capitol is given 60-day period by the consortium from the receipt of the notice of intention, whether or not to decline or to accept the offer based on the shareholders agreement (SHA) to rehabilitate-own-operate-maintain the Provincial Electric System. After the lapse of 60-day period, the consortium will sell the shares to third party at a price not less than the sale price stated in the notice.
The consortium is composed of the SPC Power Corp., SPC Light Company, ARCC investments and Pure and Pam, Inc.
The provincial government may end up buying back the power utility at only 10% of shares, excluding the water utility.
But the question is can the provincial government afford to re-acquire the whole of BLCI’s shares? The shares totaled 52,500,000 sold by the consortium at P6.67 per share or equivalent to over P350 million.
The consortium appeared to be rushing to offer for sale the entire number of BLCI shares (70%) as its franchise is to expire sometime in October of next year. And it seemed that the provincial government may hesitate to endorse its franchise renewal.
Provincial Board Member Atty. Tommy Abapo asked the consortium to give the Capitol ample time as this (offer) is to be tackled and study more by the provincial board during the meeting of the committee of the whole presided over by acting vice-Guv Benjie Arcamo.
Under the controversial joint venture agreement involving the sale of PPUD (provincial electric system and provincial water system) entered into by then Relampagos administration and the consortium, the latter (consortium) got the lion’s share (70%) and the Capitol, 30%.
But the group of then OGAR and lawyer Jordan Pizarras wanted the province to buyback the entire shares of the BLCI in the name of general public welfare.
Based on the letter dated May 28, 2024 of the Local Finance Committee (LFC) under the governor’s office, the provincial government presented three options: buyback the 70% so BLCI will be fully owned by the province; buy only 10% so province will increase its stakes to 40%; and maintain existing 30% and negotiate with the interested buyer to increase the province share to 40% after acquiring additional 10% shares.
But certain concerns/questions arose such as, can the capitol afford to buy the entire 70% of the shares offered by the consortium? If the province decides to buy the total 70% of the shares, is it capable to managing the utility and does it have the financial and technical capability to run the power utility? Can it secure a congressional franchise to operate if it owns it entirely?
The LFC told the meeting of the whole of the Sanguniang Panlalawigan last week, that if ever the province acquires the 70% of shares, the provincial government has to slash its budget for social, health, infrastructure and other items to meet the required amount to buy the 70% of shares.
“If this track is pursued, a huge chunk of our social services, infra projects and other programs and activities will have to be sacrificed,” LFC said.
The LFC has recommended that the provincial government is considering the amount of P6.67 as fair market value of per share offered by the consortium.
It also offers to buy the 7,500 shares equivalent to 10% with a total value of P50,025,000.00. This is breakdown into the following: SPC Power Corp’ 4,275,000 shares at P6.67 equals to P28,514,250.00; SPC Light company, 2,303,571 shares – P15,364,821.00; ARCC Investments, 910,714.29 shares – P6,074,464.29; and Pure and Pam, Inc., 10,714.29 shares – P71,464.29.
Given the above shares, the Capitol should raise and allocate the P50,025,000.00 as payment of 10% of the shares to be acquired.
When the offer to acquire the 10% of the shares is not accepted by the consortium, the provincial government may persuade the BLCI to increase the value of its CSR projects and activities. (rvo)
