Napocor eyes P15-B bond float this month

State-owned National Power Corp. (Napocor) wants to offer some P15 billion worth of peso-denominated bonds this month once the issue of its ability to settle its obligations are resolved.


The issue would have to be settled with the Finance and Justice departments, Napocor president Froilan Tampinco said.

He said if the plan pushes through, the company would issue 5- to 10-year bonds.

Proceeds from the bond offer will finance its budget for the rest of 2010 and the first quarter of next year, Napocor president Froilan Tampinco said.

The company is now determining if it would offer the bonds to retail and institutional investors.

Tampinco said Napocor is firming up talks with various financial institutions for the bond offer. "We're negotiating with Land Bank as arranger. There are initial talks with Land Bank but ANZ Bank may also come into the picture and, of course, DBP and PNB."

Napocor has revived its plan to issue peso bonds to support projects in the pipeline under the small power utilities group (SPUG).

Earlier, it set aside a P7-billion bond offer after it successfully obtained a P4-billion bridge financing.

Under the Electric Power Industry Reform Act (EPIRA), Napocor must privatize its power plants, after which, Napocor will be left with operating SPUG and the power plants that remain unsold under the Power Sector Assets and Liabilities Management Corp.– created under the EPIRA to sell the Napocor assets.

The Napocor chief earlier said Napocor is still studying if it needs to raise the entire P15 billion since it has a pending petition to collect universal charge from its customers.

The universal charge is a non-bypassable charge against end-users for purposes spelled out in the EPIRA, one of which is missionary electrification.

SPUG plans for power development in unserved areas, assessing the requirements and prospects for electrification including the program for private sector participation. It also acts as the petitioner and local administrator of the universal charge for missionary electrification.

Missionary electrification is financed by revenues from SPUG areas and the universal charge from electricity end-users as designated by the Energy Regulatory Commission (ERC).

SPUG operates 304 power generating units with total capacity of about 129 megawatts, including a hydroelectric plant and a hybrid wind turbine farm. It serves 78 island grids and eight isolated grids with 39 electric cooperatives and three local government units as customers. –VS, GMANews.TV