PSALM seeks MB nod for $ 700-M loan
Monday, June 19, 2006
The borrowing spree for National Power Corporation (NPC) continues with its transferee-company Power Sector Assets and Liabilities Management Corporation (PSALM) currently seeking the approval of the Monetary Board (MB) for new round of $ 700-million loan to plug its cash needs for the year.
"The debt servicing requirement of NPC is close to what we’re borrowing," PSALM president Nieves L. Osorio told reporters in an interview.
Once the company secures MB approval, she noted that they would immediately send out request for proposals.
"We’re getting a lot of offers for loans, so I don’t even think we need to hold a roadshow for it," she related on how the planned borrowings is being received by the capital market.
The PSALM chief executive would not specify though what terms they are looking at.
The bulk of NPC’s cash requirement will be for the repayment of a $ 500-million loan falling by August this year.
Despite the mandated transfer of NPC’s P200-billion worth of outstanding loans to the national government, the entire power industry was taken aback to learn that the company is still saddled with $ 7.0 billion in stranded debts.
The country’s energy officials are already resigned to the fate that since the privatization of the generation and transmission assets of NPC are facing eternal delays, no hefty cash will flow back into its coffers; thus the need to resort to loan procurements.
Through the long-calendared assets divestment, PSALM could have raised as much as $ 5.0 billion (based on valuation of the asses), but this turned out an elusive goal since even the initial payment of its first big-ticket asset sale, the 600-megawatt Masinloc facility, has yet to reach any hope for a successful close.
Given its dilemma on shrinking financial resource, NPC’s only recourse at this point is to save on operating costs, a strategy which company president Cyril C. del Callar has been asserted to media and in various forums.
Strategy-wise, the staterun power firm set on the top of its list the need to trim down its utilization of oil-based power plants because of the surging global oil prices. The slashed capacity from these facilities shall be offset by higher utilization of those running on indigenous fuels.
posted by philpower @ 5:06 PM,
