PSALM completes sourcing of Napocor’s $530-M funding requirement for 2001

The Power Sector Assets and Liabilities Management Corp. (PSALM) has raised the necessary amount to cover the entire $530-million financing requirement of the National Power Corp. (Napocor) for 2001, PSALM president Edgardo Del Fonso said.

A large part of the amount will come from the $500-million Eurobond offering which the Department of Finance (DOF) successfully launched last week, Del Fonso said.

The DOF has allowed the Napocor to piggyback its financial requirement with the DOF as the governing can no longer afford to grant a guarantee to Napocor because of its ballooning budget deficit.

Del Fonso said the DOF will turn over the proceeds from the bond offering to Napocor within this month.

He said the balance of $30 million would be raised by PSALM through short-term borrowing and bridge financing from local banks.

The PSALM president said Napocor still has an "open credit line" from local banks particularly from the existing window for foreign currency deposit units (FCDU).

Part of the $500-million bond float, he said, would finance maturing obligations of Napocor including a loan for $144 million from ING Barings which matured last month.

He said they have not yet firmed up where the remaining $386 million will be used. "We will finance as the need arises," he said.

But he said part of the fund will go to capital and operating expenses of the country’s state-run power generating firm.

At the same time, Del Fonso said they have been soliciting the approval of Napocor’s creditors to allow the PSALM to absorb all the liaibilities of the state-owned power company.

"Under the law, PSALM will take over all the assets and liabilities of Napocor. We need to transfer them to PSALM but we need the approval of the creditors," he said, noting that they would not encounter any problem on the transfer since these are all procedural. – Donnabelle Gatdula