Santiago added that in reply to this, PSALM president Rafael Lotilla explained that YNN was considered as a so-called â€œspecial purpose vehicle.â€ He added that as a special purpose vehicle it was established only to buy the power plant, which explains why YNN is undercapitalized and why it was incorporated only recently, Santiago recalled.
According to Lotilla
, as a special purpose vehicle was established to avoid legal complications that might arise if a Filipino company insists on the alleged right to match the bid of a foreign investor.
â€œThat explanation is weak,â€ said Santiago. â€œThe more important point is that PSALM
refused to give YNN
a guarantee for cost recovery, and yet YNN
proceeded to bid for Masinloc, and even paid 40 percent of the bid price amounting to $224.7 million.Why would a special purpose vehicle be willing to pay upfront 40 percent of the bid price, when there is no guarantee for cost recovery?â€ she