LEVY
AS BUYERS line up to assess the Jamaica Public Service Company, it emerged this week that at least one Jamaican company, the Broilers group, which recently branched out into energy, has been approached by foreign dealmakers seeking partners on the venture.
Another local company with foreign roots was said to have 'expressed interest', but its principals could not be reached immediately for comment.
Mirant Corp, which has contracted JP Morgan to arrange the sale of its 80 per cent stake in JPS, had only a terse comment on the levels of interest in the power plant.
"The sales process is under way, we can't provide any more information. That information is confidential," said Corry Leigh, media contact at Mirant Corporation.
"I can't comment on that," she responded.
The sale comes as research into new uses of electricity lines heat up worldwide. Power cables are being explored as a new medium for transmitting data and voice.
International interest
It is believed that this development has piqued the interest of at least one international telecoms firm in JPS.
Sources had initially told the Financial Gleaner that Jamaica Broilers Group - a chicken producer which has branched out into energy production with plans to market ethanol - was making preliminary enquiries about JPS, whose American parent is selling its 80 per cent controlling interest in the monopoly power provider.
But nixing the suggestion, Broilers' chief executive Robert Levy said he had no interest in buying the electricity plant.
"I'm already involved in something political - chicken," said Levy.
His group is also pulling together financing, a mix of debt and equity, of about $1.1 billion (US$17 million) for an ethanol plant that will produce 60 million gallons of fuel grade ethanol annually, starting May 2007.
Levy said, in relation to JPS, that he had been approached by a company acting on behalf of other investors who were seeking partners to bid for the power plant, saying feelers were put out by the same firm that structured the deal for Cogent Inc, the American company that provided the fingerprint voter verification system for the Electoral Office of Jamaica.
The Broilers boss said he has asked that a package to be sent to him, but was unlikely to get involved.
Undecided
Jamaica, which has the option of first refusal on the sale, is still to decide whether it can raise funds for the purchase, a decision to be made in "a month or two" by Cabinet, Energy Minister Phillip Paulwell said Wednesday.
"Selling Government's shares is receding as a viable option," he told the Financial Gleaner, speaking of the minority one-fifth stake that Government had planned to sell via the stock exchange.
The minister said several expressions of interest have flowed through his office, noting that JPS' assets were seen as a good buy.
It's unlikely - though Paulwell claimed it as a viable option - that Jamaica which sold controlling interest in JPS to Mirant Corp in 2001 for US$201 million, will opt for a buy-back, being strapped for cash, and burdened by a $858 billion debt and a fiscal deficit.
Paulwell insisted that the option remains on the table, adding that there were ways to structure acquisitions that would not necessarily require full upfront payment of the cost.
Mirant, however, is unlikely to be receptive to an offer that does not come with cold cash, having already announced that it was liquidating its foreign assets to boost revenues and enhance shareholder value on the back of its emergence from Chapter 11 bankruptcy.
The American company's announcement of the sale July 11, took Jamaica and analysts by surprise, coming as it did just five days after a successful 10-year bond placement in the U.S. that raised US$180 million for JPS.
Jamaica, if it decides not to reacquire the power provider, will have a say on the final buyer.
"We pretty much have a veto on who takes it over," Paulwell said.
The sale is to be finalised within a year, he said.
