TAQA makes J$650m on JPS, Caribbean assets sale
Published:Friday | July 15, 2011 | 12:00 AM
Steven Jackson, Business Reporter
Abu Dhabi-based TAQA made a US$7.6-million (J$652 million) profit on the sale of its energy assets in Jamaica and the Caribbean.
The March quarter financial disclosure supports a statement made last week by Jamaica Public Service Company (JPS) president and chief executive Damian Obiglio that he did not "think TAQA lost money on JPS", but contradicts initial reports in January that TAQA sold its US$320-million stake in regional assets for no gain or loss.
TAQA said it sold its share of Caribbean assets on January 16 for a consideration of AED1.151 billion (US$315 million), resulting in a gain of AED28 million (US$7.6 million).
The assets had a carrying value of AED1.123 billion (US$305 million), the energy company said. AED refers to United Arab Emirates dirham currency.
TAQA last year decided to divest its investment in the Marubeni TAQA Caribbean joint venture that included a 40 per cent stake in JPS.
TAQA exited its US and Caribbean operations to focus primarily on the power sector in the Middle East and North Africa. It is majority owned by the oil-rich government of Abu Dhabi, the capital of the United Arab Emirates, though more than a quarter of its shares are public.
TAQA bought a 50 per cent stake in Marubeni's existing Caribbean operations just under three years ago; consisting of equity stakes in power generation and transmission facilities in Jamaica, Trinidad & Tobago, and Curaçao.
In April, Asia-based Korea East West Power (KEWP) bought the stake in Marubeni Caribbean operations formerly held by TAQA. KEWP is Korea's largest thermal power-generation firm in sales volume and installed capacity, and owns and operates more than 9,500 megawatts of power-generation facilities in Korea.
TAQA's smooth departure was due to it exercising an exit clause with Marubeni according to previous financial disclosures. The clause absolved TAQA of its share of debt obligations related to the joint venture which stood at some AED2 billion (US$48.2 million) at December 2009 consisting of AED1.1 billion (US$26.5 billion) in long-term liabilities and the remainder in current liabilities.
TAQA recorded net profit of AED311 million (US$84.6 million) for its March 2011 quarter or 29 per cent less than year earlier levels, while holding total equity of AED16.261 billion (US$4.4 billion).
KEWP is the fourth partner in JPS in a decade.
Japan-based Marubeni bought US-based Mirant Corporation's Caribbean-based operations in April 2007 for US$1 billion including related debt of US$350 million, power purchase obligations of approximately US$153 million and working capital at closing. The Jamaican Government sold its majority in JPS in 2001 for some US$201 million, but retains a 19.9 per cent stake in the monopoly power distributor through the Accountant General and Development Bank of Jamaica.