Napocor to borrow $300M

The National Power Corp. (Napocor) will pursue its plan to borrow $300 million to $350 million after getting an assurance of a government guarantee from the Department of Finance (DOF).

Energy Secretary and Napocor chairman Jose Isidro Camacho said he spoke with Finance Secretary Alberto Romulo who said he would support Napocor’s financing plan. Earlier, the DOF had expressed apprehensions about extending a government guarantee due to a ballooning budget deficit.

Napocor president Jesus N. Alcordo said there are a number of international financial institutions that have signified an interest in submitting a proposal for a borrowing scheme. They include JP Morgan, Citibank N.A., HSBC, ABN Amro, Deutsche Bank, Standard Chartered Bank, and ING Bank. Alcordo said he expects these firms to submit their respective proposals soon.

Napocor will use $144 million or close to half the $300 million that will be raised to settle an obligation with ING Barings that will mature this November. The balance will be used for the "general funding requirements" of the company.

Alcordo said they are still studying what kind of borrowing scheme to use. But Camacho said based on the market situation, the most preferable mode would be through loan syndication from banks.

Alcordo said they are thinking of a loan with short-term maturity of about three years. "We want, though, to remain flexible depending on the market," he said.

As of first quarter of 2001, Napocor had a total debt of $8.917 billion. For this year, Napocor will need at least $835.743 million to service its loans.

Despite its huge debts, Napocor had always been able to borrow because of government backing.