Power firm to list shares

Cebu-based power generation firm Salcon Power Corp. (SPC) will list its shares at the Philippine Stock Exchange (PSE) today, the second issue to break into the stock market this year.

SPC is majority owned by Salcon Philippines Inc., a 60 percent subsidiary of Singapore’s Salcon Ltd., which is into the development of power plants and other industrial projects such as palm oil mills, liquid storage tanks, water treatment plants, and waste water treatment plants.

The company will list 1.5695 million of its common shares with a par value of P1 per share on the PSE’s first board. Of these, 313.9 million shares or 20 percent were offered to the public, divided into two equal tranches of 156.95 million primary shares and secondary shares.

The offered shares were priced at P1.80 each, generating gross proceeds of P565 million which SPC will use to partly finance its investments in the $27 million (P1.4 billion) Eight Islands Diesel Project to be implemented by its wholly-owned subsidiary Salcon Island Power Corp. (SIPC).

SPC’s flagship and initial venture in the Philippine power industry is the 203.8 megawatt (MW) Naga Power Plant Complex in Cebu bidded out by the state-owned National Power Corp. in 1994 for a 15-year rehabilitation, operation, maintenance and management (ROMM) agreement.

In February 2000, SPC successfully bid for the installation of diesel engine-driven power plants with an aggregate capacity of 50 MW (of between 5 MW to 15 MW) in a total of eight islands in the Philippines.

The company intends to fund 30 percent of SIPC through equity and 70 percent through debt. Its equity contribution amounting to P417 million will be partially sourced from the IPO with the balance to be derived from internally generated cash.

The P972 million project debt portion, meanwhile, is intended to be sourced from financial institutions.

Since then, the company has extended its participation in other power projects in the country such as its acquisition of 40 percent of Mactan Electric Co., a power distribution franchise in Lapu-Lapu City, Olango and Cordova in Mactan, Cebu; another ROMM contract for the Bohol Provincial Electric System; a 5 MW generating facility in Samal Island, Davao under a joint venture with Davao del Norte Electric Cooperative; and the 29 MW Timbaban and 32 MW Villasiga hydro-electric power plants in Panay Islands. – Conrado Diaz Jr.