Napocor to raise P15 billion from bond offerings this month
Posted on May 8th, 2010
National Power Corp. (Napocor) president Froilan Tampinco that they will be offering about P15 billion worth of peso-denominated bonds and want it to be in place within the month. The proceeds for the bond offerings would be used to fund the company’s budget requirement for the rest of the year and up to the first quarter of next year, Tampinco added.
He also said that Napocor is still contemplating on whether the bonds would be offered to retail and institutional investors. The company is in talks with different financial institutions for the planned bond offering. “We’re negotiating with Landbank as arranger. There are initial talks with Landbank but ANZ Bank may also come into the picture and of course DBP and PNB,” he said.
The plan to issue the bonds was revived by Napocor early this year as it realizes the need to raise funds to continuously support its small power utilities group (SPUG) projects in the pipeline. If the plan pushes through, Tampinco said they would issue five to 10 year bonds.
He added that they are still studying if they need to raise the P15 billion requirements from the bonds, since they have a pending petition to collect universal charge from its customers. Universal charge is a non-by passable charge imposed from all electricity end-users for purposes stipulated in the Electric Power Industry Reform Act (EPIRA), one of which is missionary electrification.
“The amount we’re applying for amounts to P17 billion for 2009 to 2018 or translating to 30 centavos for kilowatt-hour. But it’s still an application and is still waiting the ERC’s approval,” Tampinco said.
Under the EPIRA, Napocor needs to privatize its power plants, after which, it would be left with the function of operating the SPUG and those power plants that will not be sold by the Power Sector Assets and Liabilities Management Corp. (PSALM).
EPIRA also mandates that funds to be used for the operations of SPUG should come from the revenues from sales in the missionary areas and from the universal charge for missionary electrification as determined by ERC.
