PNOC-EC to borrow $200-M in July

The PNOC-Exploration Corp. will borrow some $200 million through a loan syndication or a private placement to finance its maturing obligation and operating expenses.

PNOC executive vice president Alfredo Parungao said the loan, which was approved by the Department of Finance and PNOC board, will be contracted in July this year.

Parungao said they have yet to get approval from the National Government to guarantee the loan. "We already got approval for the fund raising scheme but we haven’t got NG’s willingness to guarantee it," he said.

Of the amount to be borrowed, $175 million will be used to pay for a $175-million loan from various banks led by Citibank N.A. which is expected to mature in March 2004.

The loan from Citibank was used by PNOC-EC to finance its investment in the $4.5-billion Malampaya Deep Water-Gas-to-Power project in Northwest Palawan.

The remaining $25 million, Parungao said, will be utilized to finance various additional investments in the company’s oil rim development projects.

Parungao said they have received some financial proposals from various foreign and local banks to handle the borrowing scheme.

PNOC-EC was supposed to offer its shares to the public through an initial public offering (IPO) or a strategic sale in the last quarter of 2002. But due to weak market, the company decided to suspend the plan following the advice of its financial advisor.