US power producer to sell Caribbean assets to Japanese company
Published on Thursday, April 19, 2007 Email To Friend Print Version

By Jim Polson

NEW YORK, USA (Bloomberg): Mirant Corp., the US power producer that this month said it may put itself up for sale, has agreed to sell its Caribbean assets to Japan's Marubeni Corp. for $579 million to complete its exit from overseas businesses.

Marubeni, Japan's fifth-largest trading company, will assume about $350 million in debt and take on power-purchase obligations of $153 million, bringing the deal's total value to $1.08 billion, Atlanta-based Mirant said today in a statement.

Mirant, which exited bankruptcy in January 2006, said in July that it would buy back stock and sell overseas assets amid investor pressure to lift its share price. The latest sale includes controlling stakes in utilities in Jamaica and the Bahamas, as well as interests in three Trinidad power plants and two Curacao electricity businesses. Mirant said it will record a pretax gain of about $65 million on the transaction.

"It looks like they got about what I expected" for the assets, said Daniele Seitz, an analyst at Dahlman Rose & Co. in New York who rates Mirant shares at "buy" and doesn't own any. "The Caribbean is becoming almost the Florida of before because people with higher standards of living are moving in and they are using more electricity."

Wonder if there is a power monopoly in the Carribean and how it would intefere with regional cooperation?

Wonder if there is a power monopoly in the Carribean and how it would intefere with regional cooperation?

Nope, because power suppliers are regionalised and making plenty money in their own rights. Secondly, has no implications for the Caribbean Single Economic Act.

Thanks, just need to understand the terms you laid down like

"power suppliers are regionalised"

From a meeting I attended a while ago, over in the island of Hispanola or specifically Dominican Republic, their government have struck a deal with Venezuela for oil through CHavez trade policies. They give oil in exchange to have preference in trade negotiation and support of Venezuela products.

Dominican Republic may be making money but at the end of the day it goes to another coffer.

Just want to know if certain carribean islands have a particular network different from another island.

For instance since Dominican Republic is Spanish speaking Venezuela certainly have an advantage in that negotiation. On the same island with Haiti, it is not benefiting. So any money Dominican make would be being that 'middle man' on the island come from Haitian trade development.

This is what I am attempting to aim for.

Thanks otherwise.

DF...Good question bro. Hmm. I don't know in any real detail about policy in the Latin areas in any real detail, but know plenty who do. But I do know about Eastern Caribbean and the British speaking islands as I have shares in many of the key companies and it is my business to know.

But you are right in regards the Chevez policy and there is much debate about that because Trinidad is a major player in that region and has agreements with many other countries such as Barbados, Antigua etc. How all this shakes out knowbody knows yet but it is key topic of debate.

But what is clear and this goes beyond simple issues of energy is no matter how the cakes is cut some islands lose and some win big time. You only have to study the whole issue of Liat and its funding to realise the massive complexities in terms of who is really benefiting and it tends to be the smaller islands who actually contribute less and not the larger more prosperous ones who are contributing more for our ideal of a sovereign and regional air service. Many countries looking at the economics are quite right they would be in a better position to make a deal straight with the US and stuff any notion of regional airlines because it is killing them.

Finally snap. I was in the Dominican republic about June and went to see the pilot of a new community security initiative they have down there where they are trying to integrate community security safety structures into the regular police force.