Tomofumi Fukuda, chairman of Jamaica Public Service Company and CEO of Maru-beni Caribbean Holdings. - File
Marubeni has now identified the Jamaica Public Service Company as one of its underperforming assets, but Japanese chairman Tomofumi Fukuda refused to confirm or deny that it was among assets targeted for divestment.
Marubeni Corporation, Japan's fifth largest trading company, announced in May that it was planning to sell partial stakes in some of its overseas power plants considered to be underperforming in an attempt to boost profits.
But when the Financial Gleaner inquired of Fukuda whether the JPS - which posted a $515 million loss for its 2007 financial year - was among the assets to be offloaded, he declined to comment.
Fukuda is also chief executive officer of Marubeni Caribbean Power Holding, the vehicle used by the Japanese corporation to acquire its regional power plants under a US$1.08 billion deal with Mirant Corp in 2007.
Fukuda, responding to a complaint from a shareholder about the disappointing returns on investment at the company's annual general meeting on June 12, acknowledged that the light and power provider was underperforming.
Another of its new assets in the Phillipines, acquired months ahead of the Caribbean purchases, was also said to be included in plans to sell.
Marubeni has depended on its power generation businesses around the globe to generate most of its profits, which analysts forecast will contribute yen20 billion or 10 per cent to the Japanese corporation's total profit by 2010.
The company also expects profits from non-resource businesses, such as food, power, machinery and infrastructure, to support its earnings this business year, which president Teruo Asada is reported to have said would push net profits to a six-year record of yen165 billion.
The company owns 80 per cent of JPS, which at the time of acquisition by the Japanese was turning profits of almost $2 billion.
But last year, a hurricane intervened, wiping away the company's profits.
Since then, the company has come under fire for poor maintenance after a fault that originated at Duhaney Park tripped up the system and blacked out the island.
john.myers@gleanerjm.com
