BTU's acquisition of Carthage Power Company: Mr. Majed Halawi's involvement (he was the General Manager of CPC at the time)

Background

Project Finance International (PFI), a publication from Thomson Reuters, bills itself as "the most authoritative source of project finance intelligence in the world, providing fully-rounded and incisive commentary and analysis."

Facts

" In December 2003, Global entered into a definitive purchase and sale agreement related to the sale of its majority interst in CPC, which owns and operates a power plant located in Rades, Tunisia.  In May 2004, Global Completed the sale of CPC for approximately $43 million in cash."

Link: PSEG Announcement of CPC Sale to BTU Power  [see Page 3. Note 4.]

Representations and Questions

Apparently Project Finance International got the idea that BTU had hired Majed Halawi, the then-General Manager of Carthage Power Company, four (4) months or more before the sale was completed. The "hiring" of Majed Halawi by BTU apparently was noteworthy enough for PFI to include as a "news capsule" in Issue 281 - January 21, 2004

"Boston based fund BTU Power has hired Majed Halawi, former manager of the Marubeni/PSEG IPP in Tunisia, as its general manager."

Link: PFI Issue 281 - 21 Jan 2004 | PFIe:  [see: section titled "BTU Power targets the Mid East"]

The excerpt from the article available to the general public (from the same issue) describes another investment that BTU was evaluating in Turkey.  PFI draws it own conclusion regarding the challenges BTU faced  and, again, mentions the "hiring" of Majed Halawi.

"BTU Power, the equity fund set up to invest in Mid East power and energy assets, is looking to buy a 20% stake in the three InterGen build and operate (BO) gas fired power schemes which total 4000MW. The schemes were funded by a US$2bn loan from banks and US Exim and Opic back in 2000 under a 75/25 debt equity split."

"BTU Power will have to prove to Exim it was strong enough to hold this large investment. The other equity investment BTU Power is currently targeting is PSEG's stake in the Rades 471MW scheme in Tunisia owned 60/40 by PSEG and Marubeni. BTU has hired the former Rades plant manager Majed Halawi, as it own general manager."

Link: Turkey - BTU Power bids for 20% | EMEA News | PFIe:

Observations

• If Mr. Halawi was indeed working for BTU (and CPC) at the time that the purchase of CPC from PSEG Global was not yet concluded, that would create significant conflicts of interest.
• If Mr. Halawi was being presented as a BTU employee to InterGen (the company selling the power plants in Turkey), and he wasn't, that would raise a number of red flags for many of the stakeholders involved in the transaction.

Majed Halawi

According to Mr. Halawi's public LinkedIn profile he worked as General Manager of CPC from September 1999 - February 2005.  BTU is NOT listed anywhere in his profile.

Link: Majed Halawi - PDF of LinkedIn Public Profile

Conclusions

It'd be a stretch to believe that BTU could/would have made the announcement of Mr. Halawi's "hiring" to the entire world without the knowledge and consent of Mr. Halawi.

What kind of relationship existed between Mr. Halawi and BTU prior to the "closing" of the sale? You'd imagine NO relationship SHOULD exist while Mr. Halawi was General Manager of CPC and BTU was still months away from finalizing the purchase. Only Mr. Almazeedi and Mr. Halawi know for sure.

In other posts in this blog we've always allowed for the fact that any group/entity that reports totally contradictory information might have made it all up.   Maybe PFI pulled everything out of thin air.