PinoyBusiness.ORG - Home » Power

Foreign firm to present power supply options to the country

Roy — Sun, 15 May 2011 05:26:39 +0000

A United Kingdom company is offering the Philippines its power solution to help avoid power disruptions in the country.

The British Embassy in Manila said Aggreko, a developer of power solutions, will be coming in the country next week to make a presentation of its product. The embassy said the company’s expertise could help address the possible power shortage in the near future which poses a threat to businesses operating in the country.

Aggreko is bringing to the country its more than 45 years of experience in the power solution industry. The company is said to be the world leader in the supply of temporary power and temperature control services. It will present its alternative solutions to potential power disruptions when it makes its presentation to the country next week.

The target participants in its presentations include the construction industry, food and beverages, agriculture, healthcare, manufacturing, government and institutions, mining and mineral processing, ports and telecommunications, among others.

Aggreko owns the world’s largest power rental fleet which consists of diesel and natural gas generating sets. Company experts will be in Manila to present different power supply options to help businesses avoid opportunity lost and other costs that could be brought about by power disruptions.

The company will be organizing the seminar presentation in partnership with the British Embassy in Manila, through UK Trade & Investment. The aim of the seminar is to inform industries in the country of the different power supply options available in case of unavoidable future power supply shortages.

Possibly Related Topics to Read

JG Summit earmarked $700 M for its 2011 expansion

Roy — Fri, 06 May 2011 01:00:57 +0000

JG Summit Holdings Inc. is earmarking $700 million for the planned expansion this year. Most of these funds are allocated for its petrochemical and airline businesses.

JG Summit president Lance Gokongwei said the petrochemical business will be the company’s priority in the next three years. JG Summit also has stake in a property developer and may expand into power generation.

With sale of its stake in Digital Telecommunications Philippines Inc. (Digitel) to Philippines Long Distance Telephone Co. (PLDT), the company will also be able to cut its debt by $600 million, giving it “more room” for fund-raising. Also the asset sale is said to be “strategically good for JG Summit because it frees up capital that the company can invest in ventures that potentially will pay a higher return.”

Gokongwei said after the sale of its Digitel stocks to PLDT, “We will be very lightly leveraged. We will have a very good balance sheet.” According to data compiled by Bloomberg, JG Summit has bonds and loans worth P69 billion.

Last December, JG Summit said it may sell 31 percent of its stake in Cebu Air Inc. to fund expansion and pay debt, however, after the Digitel-PLDT deal, the company will have “no immediate” need to sell shares. JG Summit is the majority owner of Cebu Air, the country’s biggest budget carrier.

Gokongwei said JG Summit will invest about $200 million in a naphtha cracker plant worth $700 million that may start operations by 2013, snack and iced-tea maker Universal Robina Corp. may spend $80 million to $90 million, property unit Robinsons Land Corp. will spend as much as $200 million on capital expenditure this year, while Cebu Air will spend around $200 million.

JG Summit also plans to bid for airport projects that the government will be opening to companies for investment, and is mulling to build a power plant for its petrochemical business, said Gokongwei.

Possibly Related Topics to Read

Roach predicts Pacquiao by KO

Roy — Sun, 01 May 2011 21:50:56 +0000

Trainer Freddie Roach declared that his prized fighter Manny “Pacman” Pacquiao could very well be the first boxer to knockout former five-time world champ “Sugar” Shane Mosley on their May 7 fight at the MGM Grand Arena in Las Vegas.

Roach said that Pacquiao is in tip-top shape and said he is 100 percent ready for the fight. He said Mosley’s attacking game is perfect for Pacquiao’s aggressive style. He confidently predicted that his ward would win by a knockout. “I think all fights should end in knockouts so I’m looking for a knockout,” said Roach.

However, Pacquiao downplayed the knockout angle saying that at 39 Mosley “is still very strong and moves like he’s 30 years old.” “We’re not focused for the knockout. All we do is work hard and if the knockout comes, it comes. We’ve prepared ourselves for fighting 12 rounds,” he said.

The undisputed pound-for-pound king added, “If the knockouts come, they come. What matters is the fight that we can give to the people and the fans. I want them to be happy and excited about our performance.”

Pacquiao considers his May 7 World Boxing Organization (WBO) welterweight title defense bigger than his most recent fights against Margarito because Mosley “moves fast and he has good speed and power.” Quickly adding, “That’s what I want. He throws a lot of punches. It will be good for us and it will be a good fight.”

Mosley, who has been tagged as the underdog in their upcoming match said it only motivates him even more “to shock the world” and beat Pacquiao decisively. He believes he can hurt Pacquiao with some well-timed power shots when they trade blows in the middle of the ring.

“If Margarito, who is slow, could hit him with so many shots, think how much more I could hit him. Styles make fights, and I think I have what it takes to beat Pacquiao.” Mosley said. He predicts he would stop Pacquiao “by the seventh round.”

Possibly Related Topics to Read

Trans-Asia stock rights offer approved by PSE

Roy — Sat, 30 Apr 2011 06:19:03 +0000

The Trans-Asia Oil and Energy Development Corp.’s plan to raise fresh fund for power generation via stock rights offer was approved by the Philippine Stock Exchange (PSE).

The Phinma-led company got the nod from PSE when the latter posted a memorandum on Friday saying that its board has approved the listing of 1.16billion additional common shares to be issued by Trans-Asia to cover an equity offering to all shareholders. Each eligible shareholder is entitled to subscribe to seven right shares for every 10 existing shares held as of record date of May 18.

The offer price of P1 per share represents a discount of 21.9 percent on the market price of Trans-Asia as of March 21, which was the date the stock rights offer was approved by the board of Trans-Asia.

The net proceeds from the stock rights offer, based on the memorandum, would be used to partly finance Trans-Asia’s equity investment in the planned 135-megawatt clean coal plant in Calaca, Batangas and its investment in Maibarara geothermal power plant.

Trans-Asia tapped on the services of ATR KimEng Capital Partner Inc. to be the underwriter of the stock rights offering which would run from May 30 to June 3 this year.

The Phinma group, which is composed of Philippine Investments Management Inc. and Phinma Corp., the principal stockholders of Trans-Asia, pledged to subscribe to any shares not taken up by other eligible shareholders.

Trans-Asia was originally into petroleum exploration, and later diversified to other industries like cement manufacturing, coal trading and power generation. This year, the company expects to generate a net profit of P482.23 million, which is a considerable increase from the P14.74 million it posted a year ago. Revenue is projected to rise to P1.7 billion from P894 million in 2010.

Possibly Related Topics to Read

Globe asks NTC to intervene in the PLDT-Digitel deal

Roy — Thu, 28 Apr 2011 21:37:16 +0000

Globe Telecom, in its letter to the National Telecommunication Commission (NTC), is asking the agency to take a look, and intervene, in the recent acquisition of the Philippine Long Distance Telephone Co. (PLDT) of a majority stake of Digital Telecommunications Phils. Inc. (Digitel). Globe warned that the PLDT-Digitel is threatening to free competition and gravely places at risk the public good, because other significant market influence of PLDT as a result of the deal.

Atty. Rodolfo Salalima, acting as counsel for Globe, referred to Republic Act No. 7925 or the new Telecoms Policy Act, which was enacted into law on March 1995 because of the need for the country to liberalize and demonopolize and to veer away from the monopoly of the dominant carrier which, because of its dominant clout, power, and influence, constricted and stifled, instead of led, the growth and expansion of public telecommunications services in the country.

Salalima quoted the then Senator John Osmena in his sponsorship speech of Senate Bill 11 (which is now RA 7925) that “our telecommunications system has been cited as backward, inadequate, and a major constraint to the global competitiveness of our industries.”

“(NTC) must intervene and act now. It cannot and must not shirk from its legal obligation to intervene in the PLDT/Digitel deal and regular, if not forestall, the deal’s grave implications and impact on free competition and, in the long term, the common good. The inherent police power of the state can and must also be utilized for the common good,” he added.

Salalima stressed that the NTC must start leveling the playing field now in the name of free competition or risk a return to the monopoly of old and precisely abandoned by RA 7925, adding that PLDT’s cellular market share, because of the deal, has now grown to 70 percent, while that of Globe is 30 percent.

PLDT recently acquired 51 percent of Digitel, which owns the Sun Cellular brand, from the Gokongwei Group, and hopes to purchase the remainder from small shareholders during a mandatory tender offer.

Possibly Related Topics to Read

DTI’s trade mission to India produces $42 M investment pledges

Roy — Fri, 22 Apr 2011 15:59:24 +0000

The Department of Trade and Industry (DTI) reported that their recent trade and investment mission in India have generated new investment pledges worth $42 million. Trade Secretary Gregory Domingo said they were from three energy projects and a pharmaceutical packaging ventures.

The Philippine delegates, led by Domingo, attended the recent ASEAN-India Business Fair and Conclave held in New Delhi in its bid to penetrate India’s trillion dollar market. Other members of the Philippine mission were the Department of Agriculture, Department of Tourism, Department of Foreign Affairs and the Philippine India Business Council of the Philippine Chamber of Commerce and Industry.

Domingo said he was able to convince Indian businessmen to invest in the Philippines during his first official trip, and the trade department’s first mission to India. “India is emerging as a source of foreign direct investments (FDIs) for the Philippines. Apart from BPO companies which are directed by their principals to open delivery centers in the Philippines, more Indian companies are continuing to realize the potential of the Philippines as a gateway to the lucrative ASEAN market,” he said.

The investment pledges acquired by DTI include two 20-megawatt stand-alone liquefied natural gas (LNG) power plants in Tawi-Tawi and in Cagayan as well as a 1.5-megawatt mini hydro electric power project in Abra.

According to Domingo, the trade department is working on several initiatives for Indian businessmen locating in the country which include the improved business registration procedures; and relaxed visa norms for senior executives of IT and BPO companies. Add to this, he also announced the recently inaugurated direct flights from Manila to New Delhi of the Philippine Airlines (PAL).

During their trip, Domingo also witnessed the signing of a memorandum of understanding (MOUs) between the Associated Chamber of Commerce in India (ASSOCHAM) and the Philippine Chamber of Commerce and Industry, and between the Federation of Indian Mining Industries and the Philippine Chamber of Mining Industries represented by Philip Romualdez, to promote trade, investments, and economic relations between India and the Philippines.

Possibly Related Topics to Read

Ayala invests in hydro-electric power

Roy — Fri, 22 Apr 2011 05:33:57 +0000

Another venture that the Ayala group is breaking into is the hydroelectric power generation partnership. The conglomerate, through its wholly owned subsidiary Michigan Power Inc. (MPI) has entered into a joint venture agreement with Sta. Clara Power Corp., an independent power producer specializing in run-of-the-river power plants. Ayala Corp managing director John Eric Francia confirms this as stated in the company’s disclosure to the Philippine Stock Exchange.

MPI and Sta. Clara will be developing a run-of-the-river (ROR) hydroelectric power projects across the Philippines. MPI will take a 70-percent stake in the venture and has committed an initial equity infusion of about P600 million.

A run-of-the river hydroelectric power plant operation involves “borrowing” some river water to turn its kinetic energy into electricity and returning the same unpolluted water back into the river. Francia said, “It is considered as green because it does not produce harmful emissions. Like other renewable power technologies, it is economical as it depends on the free energy of nature as fuel.”

Speaking on the joint venture agreement, president and chief operating officer Fernando Zobel de Ayala said, “This venture builds on our current portfolio of renewable energy assets, which focuses on solar, wind and hydro power technologies. This is an important component of our plan to create a portfolio of power assets over the medium term that blends conventional and sustainable energy sources and contribute to the country’s energy requirements.”

The Ayala group has ventured into power generation as a key platform for future growth especially as demand for electricity is expected to rise in the years ahead. And since the company has yet to build its expertise in the industry, part of its strategy is forging partnership with other institutions.

In the next five years, the conglomerate plans to build a portfolio of power generation assets that will include both renewable and conventional with a capacity of 1,000 megawatts. Francia said that it is all “in line with Ayala’s campaign to augment the country’s power supply primarily through renewable and clean energy.”

Possibly Related Topics to Read

Ayala Corp. allots P79 billion for its capex

Roy — Tue, 19 Apr 2011 04:51:18 +0000

Giant conglomerate Ayala Corp. allots a record-high P79 billion for its capital expenditures this year. The company said it is in an excellent position to delve into various investment opportunities. It is particularly eyeing the power and infrastructure sector.

During the annual stockholders’ meeting, chairman Jaime Augusto Zobel de Ayala said that while the company is quite successful in its traditional markets which continue to grow, the favorable economic environment has “also ushered a renewed interest to invest in sectors that are critical to sustaining and raising the country’s growth trajectory, particularly with the government’s emphasis on increased private sector participation in the infrastructure and power sectors.”

He added that the group’s ultimate goal is to broaden its customer to reach and diversify its portfolio in a manner that creates developmental impact and economic value both for the corporation and the society as a whole.

The company first took a plunge in the power industry in 2010. It is now aiming to build its power portfolio using both renewable energy sources and traditional fossil fuels. “We are in the process of developing focused platforms across various technologies such as solar, wind, both large-scale and mini hydro, as well as thermal energy with the intent of balancing cost of energy delivery with sustainable practices,” Zobel said. The group aims to put up power facilities that can generate over 1,000 megawatts of electricity over the next five years.

The conglomerate remains on the lookout for opportunities apart from the power industry, like in the transportation infrastructure space, particularly whose which may have strategic value with other business units.

The company is bidding for a contract to operate and maintain the 17-kilometer Line 3 of the Metro Rail Transit (MRT3), which has an estimated cost of P6.3 billion. The MRT3 is one of the infrastructure projects being offered by the government under the public-private partnership (PPP) program.

Meanwhile, president Fernando Zobel de Ayala, for his part, said the highly diversified conglomerate has a healthy cash level, which stood at P29 billion as of end-December last year. “We maintain a highly flexible funding position that allows us to make sizable investments in new sectors moving forward without impairing value-enhancing initiatives such as our ongoing buy-back program, dividend payouts and meeting our funding requirements.”

Possibly Related Topics to Read

Ayala stays firm in its investment in Globe

Roy — Mon, 18 Apr 2011 16:48:09 +0000

Despite of the looming merger of rival Philippine Long Distance Telephone Co. (PLDT) and Digital Telecommunications Philippines Inc., (Digitel), the Ayala Corp. said it has no plans of leaving the telecommunications business.

Ayala and partner Singapore Telecommunications Ltd. (SingTel) were excited about the prospect of its Globe Telecom Inc., despite the tougher competition brought about by the merger of its two rivals.

Jaime Augusto Zobel de Ayala, chairman of the country’s oldest conglomerate, said “I see no reason to disrupt the partnership between Ayala and SingTel,” when asked if they would be willing to accommodate a new investor for Globe. “It’s a very interesting for the industry. It would be foolish of us to get out at this time,” he added.

Analyst earlier said that the deal between PLDT and Digitel would give the telecom giant 70% of the mobile phone market to the disadvantage of Globe. However, Zobel said they remain unfazed by stiff competition in the industry. “In fact, together with our partner, we’re very interested in building Globe up,” he said.

He added that Globe would spend $500 million to upgrade its network as it looks to protect market share.

And while its Globe Company only ranked No. 2 in the telco industry, the conglomerate has a lot of high profile businesses.

It owns property Ayala Land Inc., Bank of the Philippine Islands, Manila Water Co., and it also has interest in business process outsourcing (BPO), electronics and car dealerships. This year, the conglomerate is hiking its capital expenditures by 20% to about P80 billion to accommodate plans to expand into power generation and infrastructure.

Ayala also plans to bid for the contract to operate 2 major elevated railway systems in Metro Manila, which the government will auction under its public-private partnership program. “We believe power generation is a potential source of long-term growth for Ayala. We feel there is an opportunity for new players to come in,” Zobel said.

Possibly Related Topics to Read

Another earthquake shook Japan

Roy — Thu, 07 Apr 2011 17:25:46 +0000

Another powerful earthquake hits Japan anew on Thursday. The Japan Meteorological Agency recorded the quake at a magnitude of 7.4 while the US Geological Survey said it was 7.1. The recent quake triggered a tsunami warning for one prefecture and advisories in other prefectures. The National Police Agency said there were no reports of casualties from anywhere in the earthquake zone.

The Tokyo Electric Power Company said that workers were evacuated from the Fukushima Daiichi nuclear plant following the quake. The Tokyo Electric sad it has communication with the plant and the power is still on in there. There were also no immediate reports of damages.

The Japan Meteorological Agency said the quake’s epicenter was off the coast of Miyagi in northeastern Japan. The US Geological Survey reported that the quake was centered 41 miles (66 kilometers) from Sendai, which was one of the areas worst hit by last month’s 9.0-magnitude quake; and 73 miles (118 kilometers) from Fukushima, where a crisis has been under way at the nuclear plant since last month’s tsunami.

Public broadcaster NHK said a tsunami warning was issued for Miyagi prefecture saying that people in the area should evacuate away from the shore to a safe place. Likewise, NHK also issued tsunami advisories for the Pacific coast of Aomori Prefecture, and for the Iwate, Fukushima, and Ibaraki Prefectures.

According to the Pacific Tsunami Warning Center, based on all available data, “a destructive Pacific-wide tsunami is not expected and there is not a tsunami threat to Hawaii.” The quake was centered 207 miles (333 kilometers) from Tokyo, said the US Geological Survey. It was 15.9 miles deep and took place shortly after 11:30 p.m. local (10:30 a.m. ET), the agency reported.

Possibly Related Topics to Read

Aboitiz group earmarked P49 B for its 2011 Capex

Roy — Mon, 28 Mar 2011 12:16:24 +0000

A total of P49 billion for its capital expenditures (capex) this year is being allocated by the Aboitiz Equity Ventures Inc. (AEV), the bulk of which will be used to fund its proposed coal-powered projects. According to company senior vice president and chief financial officer Stephen G. Paradies, P46 billion of the capex would go to Aboitiz Power Corp. (APC). “This is inclusive of the share of our partners in those power businesses where we have partners. So if you take just our proportionate share of APC, it amounts to P24 billion,” he explained.

Paradies said that the planned capex for APC would be used for the construction of a 300-megawatt coal-fired power plant in Subic, which will be done with their partner. He added that it is being considered that the capacity of the project would be increased to as much as 600 MW, and therefore, the project cost would increase too.

The APC was, according to Paradies, was planning to raise as much as much P51 billion in borrowings to specifically fund two power projects over the next few years. He explained earlier that the company would start arranging syndicated loans for its coal power projects in Subic and Davao starting on the second half of 2011.

For Subic, the planned borrowing could either be P17 billion, if they would stay with the original 300-megawatt coal facility, and P34 billion should they decide to pursue the increased 600-megawatt capacity. For its Davao facility, APC was looking at raising P17 billion for a proposed 300-megawatt coal fired power plant.

The amount cited though, as Paradies clarified, included only the debt portion of the planned projects and would be drawn down by APC in tranches over a certain period. He said for these borrowings, the company was looking at longer tenors of about 12 years.

The Subic coal facility is expected to start construction within the year, according to APC president and chief executive officer Erramon I. Aboitiz, who said that the company was already finalizing its engineering, procurement and construction contracts with Formosa Heavy Industries.

Possibly Related Topics to Read

Trans-Asia signed supplier deal with SEM-Calaca Power plant

Roy — Thu, 24 Mar 2011 06:27:48 +0000

Trans-Asia Oil and Energy Development Corp., a publicly listed firm, recently signed a contract with SEM-Calaca Power Corp. for the purchase of Trans-Asia of power generated from the Consunji-led Calaca Power Corp. Trans-Asia, in its disclosure submitted to the Philippine Stock Exchange (PSE) said it signed on Wednesday the contract “to purchase generated energy,” which will be valid for three years.

Trans-Asia President Francisco L. Viray said the company was buying the generated output as a retail electricity supplier (RES). He did not indicate though, how much of the plant’s output The company would buy from SEM-Calaca. Earlier, Trans-Asia was awarded a RES license by the Energy Regulatory Commission (ERC)

ERC chairperson Zenaida Ducut said that a RES license holder like Trans-Asia will be able to actively participate in the electricity market once open access and retail competition are put in place. Under an open access environment, large power users will have the option to choose their own power suppliers. Under the status quo, power users, whether big or small, are limited to the suppliers with jurisdiction over their areas.

SEM-Calaca Corpopration, is company formed by DMCI Holdings and Semirara Mining Corporation to Handle the Calaca coal facility, which was previously owned by the government through National Power Corp. The investment of SEM-Calaca in the Batangas coal facility was earlier estimated at $483.6 million which includes the acquisition cost of $361.7 million. The remaining $121.89 million will go to the rehabilitation and working capital requirement of the said power plant.

Possibly Related Topics to Read

Government officials said Philippines is safe from Japan nuclear meltdown

Roy — Mon, 14 Mar 2011 00:45:26 +0000

In a worst-case scenario, any radioactive cloud from Japan will not affect the Philippines, according to Science and Technology Secretary Mario Montejo. Philippine Nuclear Research Institute director Alumanda de la Rosa said, “For the Philippines right now, there is no significant effect, but we are monitoring the situation so we can advice officials on what is the best action.”

Montejo and De la Rosa are one saying that the meltdown in Fukushima Daiichi power plant in Japan will not affect the Philippines since Japan has the facilities to stop the spread of radioactive waste.

The situation in Japan, according to Montejo, should not be compared with the accident at the Chernobyl nuclear power plant in Ukraine in 1986, “We have to distinguish that the plan is Japan is different from Chernobyl. It has a containment unit. Even if there is meltdown, the radioactive waste is contained in reactor inside the structure,” he said.

Meanwhile, in the light of the nuclear problem in Japan, Caloocan Bishop Deogracias Iniguez is calling on advocates to abandon the plans to revive the Bataan Nuclear Power Plant (BNPP). “The explosion that occurred at a nuclear facility in Japan confirmed our fears before and until now, he said.”

Party list Rep. Bernadette Herrera-Dy of Bagong Henerasyon likewise does not the government to activate the BNPP. “Filipinos can still hope for an efficient and a safer power source at cheaper cost if we can transform the BNPP into a natural gas plant,” she said.

Herrera-Dy believes that what happened to Japan is the strongest argument against attempts to revive the BNPP. “Taking the side of caution is a correct move, nuclear power is not for us,” she said. The congresswoman also added that since the BNPP lies near the Philippine Fault and the West Luzon Fault, seismic activity might occur in the area and trigger threat of radiation leak. She is calling for the House of Representative committee on energy to immediately put any bill seeking to revive the BNPP to the legislative backburner.

Possibly Related Topics to Read

PCSO forfeits unclaimed Lotto prizes

Roy — Sun, 13 Feb 2011 02:39:24 +0000

Because they remained unclaimed after the one-year claiming period, the Philippine Charity Sweepstakes Office (PCSO) has forfeited a total of P605,273,958.20 prizes from all online lotto games in Luzon, Visayas and Mindanao draws. These forfeited prizes, according to the PCSO, were mostly minor prizes of the EZ 2, the 3-digit game, 4-digit game, 6-digit game, 6/42, the Mega Lotto, the 6/42 and 6/49 Super Lotto, and the short-lived Power Lotto game.

PCSO publicity and advertising manager Manny Garcia said the unclaimed prizes, representing about 55 percent of the total sales of the online lotto games, will be reverted back to the charity fund of the agency. “Unclaimed prizes revert and form part of the charity fund after one year,” he said, adding that the forfeited prizes would be a big help to pursue the PCSO’s vision and mission.

Garcia said, “Our mission is be a model government agency in carrying out its responsibility to provide medical and health services to the disadvantaged sectors of society through a professional workforce with integrity, competence, a deep sense of accountability and transparency in all its official transactions.” He said the PCSO is also extending financial assistance and contributions to certain national programs created by various legislative enactments.

The charity fund where the unclaimed prizes are placed, according to him, is a trust and liability account, created solely to finance and support the health programs, medical assistance and services and/or charities of national characters. Garcia also added that disbursements from this charity fund, regardless of the amount involved, do not only require the authorization of the PCSO Board of Directors but also the approval of the Office of the President.

Possibly Related Topics to Read

Meralco sells bonds to pay debts

Roy — Sat, 04 Dec 2010 22:03:09 +0000

To raise funds to pay for its maturing debt, the country’s biggest power distributor, Meralco Electric Co., will be selling P4.8 billion worth of seven- and 10-year notes. In its disclosure to the Philippine Stock Exchange, the electric company signed an agreement to sell the seven- and 10-year fixed rate bonds at a price of 5.8327 percent and 6.4538 percent respectively. Meralco tapped BPI Capital Corp., as its issue manager and book runner of the bond issue.

Oscar Reyes, chief operating officer of Meralco, said the company will be using the proceeds of the bonds to pay the company’s maturing debt of almost the same amount this month. “This is not related to our power generation project,” Reyes said.

Meanwhile, chief finance officer Betty Sy-Yap of Meralco said that the distribution company might take advantage of the borrowing opportunities in the domestic and international markets due to low interest rates. She also said that the company could use the proceeds of the borrowings to finance its foray into power generation and debt. “Interest rates are very low, there’s so much liquidity in the banking system today. And I think the confidence of investors in the Philippines business environment allows that,” Sy-Yap said.

The power distribution company also signed a P5.5-billion bond float agreement with 13 institutional lenders in December of last year for its funding requirements. First Metro Investment Corp. arranged the issue with SB Capital Investment Corp. and Insular Investment and Trust Corp. as co-arrangers.

Meralco accepted P1.6 billion in fixed rate bond offers due on 2014 and P3.9 billion worth of floating rate notes. It spent over P7 billion for capital expenditures this year to ensure the reliability of its systems.

The company, now controlled by the Philippine Long Distance Telephone Co., San Miguel Corp., First Philippine Holdings and other minority shareholders, has over 4.5 million subscribers in its franchise area.

Possibly Related Topics to Read

The Obligation in Power Sector

PinoyBusiness — Thu, 23 Sep 2010 07:36:53 +0000

The Dept. of Energy said that the half of the debts on the power sector can be or may be recovered from the consumers. The National Power Corp. (Napocor), Power Sector Assets and Liabilities Management Corp. (PSALM), and the National Transmission Corp. (Transco) had a P932.21 billion of obligations that can be reduced by half if they will pass the amount to the consumers via a universal charge component of electricity bills.

The National Power Corp. (Napocor’s) obligation totaled to P47.97 billion, The National Transmision Corp. (Transco’s) obligations has reached P99.15 billion but the most outstanding obligation is with the Power Sector Assets and Liabilities Management Corp. (PSALM) that has reached P785.09 billion.

If they will pay their obligations over 25 years it surely will lessen its impact on the consumers and especially on the national budget. $2 billion in five years, that can be the strain amount on the national budget.

The other option is for the government to borrow funds from the multilateral institution. But the government has not taken yet a action because the discussions are still on going. This issue must have an action because this may be a big problem if the debt will increase much more and can affect not only our national budget but also our economy.

Possibly Related Topics to Read

Resolving Power Shortage

PinoyBusiness — Wed, 22 Sep 2010 22:30:59 +0000

Power shortage is costly. That is surely will be the one of many issue that will be discuss in the upcomming 19th Mindanao Business Conference.

The conference will surely discuss how to gain more and more investment although the region is in power shortage. They said that the power shortage is limmiting
their production rate and due to that they are losing many customers. They also said that if they used alternatives such as generators they will surely pass the expense to the customers which is a not so good idea.

The conference is also looking forward to the improvement of the sectors like agriculture, mining, and energy which is in drought this 1st half of the year due to the shortage of power.

And if they succeeded in improving in this sectors they are expecting to attract more or less a billion peso on investments and when it happens it will surely boost the region’s economy and can help them to resolve the power shortage.

The 19th Mindanao Business Conference will be held in Cagayan de Oro on the 17-18 of of this month. This conference can be another turn out in the field of business especially in the Mindanao region.

Possibly Related Topics to Read

Petron spent P6 B in capex for first half of 2010

Roy — Sat, 17 Jul 2010 14:50:39 +0000

The country’s biggest oil refiner and retailer, recently disclosed that for the first half of 2010, it has already spent more than P6 billion for its capital expenditure projects and debt repayments. Petron Corp., in its disclosure to the Philippine Stock Exchange (PSE), said it used the proceed from its preferred share issuance early this year to fund the construction of its power plant, retail service station expansion and repayment of short-term debt.

Last March of this year, Petron was able to raise P10 billion from the issuance of 100 million perpetual preferred shared, which were offered at P100 per share, and a dividend rate of 9.5281 percent per annum. From the proceeds of the sale of the preferred, the company earmarked P5 billion for the power plant, P3.9 billion for the repayment of debts and for retail network expansion, it set aside P1 billion. According to Petron, the company spent approximately P1.64 billion for the construction of the 70-megawatt power plant, which started only this year.

The P10-billion power facility is expected to improve the reliability, sourcing flexibility and cost efficiency of the refinery in order to meet the company’s growing steam and power requirements. It will be put up within the company’s refinery compound in Limay, Bataan and it is expected to start running by 2012. By using its own power plant to generate its power requirement, the company is expected to generate P1 billion in savings per year.

Aside from the P6 billion it spent in capital expenditures and debt repayments for the first half of the year, the company also reported to have spent about P532.6 million for its retail network expansion. Petron said it is part of its target to protect its leadership in the local oil industry.

Possibly Related Topics to Read

IFC to invest $300 million in RP’s power sector

Roy — Sun, 11 Jul 2010 06:02:42 +0000

The country’s power sector, including renewable energy projects, is likely to get a big boos from the World Bank (WB). WB’s private sector arm, the International Finance Corp. (IFC), is looking at pouring in more than $300 million in investment to the said industry in the Philippines.

IFC resident representatives to the Philippines, Jesse Ang, said they have already invested $900 million in the Philippines in the last three years. “Around $600 million to $700 million of the $900 million went to the power sector,” Ang said.

He also said that IFC was looking at renewable-energy projects, such as biomass, wind and mini-hydroelectric power plants.

“Renewable energy is one are we’re focused on. In the Philippines, when you say renewable energy, it involves solar, biomass and wind. We think hydro power plants are good for the country, because if we have the resource, we should use it. Although there is higher capital expenditure, the operating cost of the hydro is much less. And we find them good deliverers of power, and they’re quite flexible as you can switch them on and off. So if there are opportunities to do more hydros, why not?” Ang said.

According to him, IFC is currently talking with various renewable-energy developers. “The companies we’re in talks with are focusing on mini-hydro, biomass, wind and solar. There’s a lot of interest in the Philippines right now for renewable energy.”

For last year, in order to assist local banks in moving loan financing away from high-energy-consuming projects toward those favoring energy efficiency and emission reduction, IFC launched its sustainable-energy finance program in the Philippines.

IFC head of advisory services and sustainability program manager for the Philippines, William Beloe, said his agency and the Department of Energy have found out there are about $8 billion worth of financing opportunities available and needed in renewable energy and energy efficiency.

Ang said, while financing renewable energy projects can be a good business, at the same time, it also helps combat climate change. He added that IFC will provide Philippine banks funding and know-how so that they can provide capital to renewable-energy and energy-efficient projects.

Possibly Related Topics to Read

La Filipina beats SMC in aquiring Bataan grains terminal

Roy — Wed, 30 Jun 2010 00:26:57 +0000

La Filipina Uy Gongco Corp., a relatively unknown local company owned by businessman Alfonso Uy, seems to be just a short step away from clinching the deal to acquire the Mariveles Grains Terminal of Asian Terminal Inc. (ATI). La Filipina has beaten conglomerate San Miguel Corp. (SMC) in its bid for the purchase of ATI’s wholly-owned unit Mariveles Grain Corp. (MGC).

ATI holds a 20-year contract to manage and develop the MGC. It will end on 2013, and renewable for another 20 years. MGC offers unloading, conveying, storage, outloading, weighing, bagging, and sampling services, and also handles bulk cargo like wheat, soya bean meal, corn and soybeans.

Although, quite unknown, La Filipina isn’t really new. Four years ago, it acquired the port facilities of the Sugar Regulatory Administration (SRA) in Guimaras Island. Aside from grains trading, it is also into corn milling, and animal feeds production, among others.

La Filipina also owns 15-percent stake in Steag State Power Inc., which is the owner of the 232-megawatt coal power plant located at Phividec Industrial Estate in Villanueva, Misamis Oriental. The company also has 1.17-percent stake in Aboitiz Equity Ventures.

SMC, for its part, was surprised when ATI announced that it was selling the Bataan grains facility to an undisclosed buyer. The company has been in negotiations with ATI since 2008 for the purchase of the said grains facility. It was confident that it would clinch the deal with ATI.

Earlier, ATI revealed that its shareholders have already approved the sale of the grains terminals to SMC, until a subsequent announcement that it was being sold to the undisclosed buyer. The proposed sale to a “third party buyer” was approved by the ATI board and will be presented to the shareholders for approval on July 30.