Finance Undersecretary Jay Singson said the PNOC-EDC was supposed to be the next big ticket item to be auctioned off by the government this year after the Philippine National Bank (PNB).
"We are still trying to come up with an appropriate privatization structure. This is why we decided to delay the privatization of PNOC-EDC to maximize the proceeds for the government," he said.
At present, he said the Privatization Council is still looking for the best scheme for the sale of the PNOC-EDC shares.
"We have yet to figure it out if the privatization scheme would conform or would be in compliance with the Electric Power Industry Reform Act (EPIRA)," Singson said.
The PNOC-EDC privatization, he said, is consistent with the overall policy of the government to get out where there are private sector interests.
"But we should see to it that our privatization moves will not result into a firesale. So we need to plan every sale," Singson said.
The government has been preparing for the sale of PNOC-EDC since the passage of the EPIRA in 2001. Under Republic Act 9136 or EPIRA, PNOC-EDC should offer about 10 percent of its stake to small investors through a public offering in the stock market.
EDC plans to privatize nine billion shares through a combined strategic stake sale and initial public offering (IPO) consisting of six billion and three billion shares, respectively.
At present, the state-owned firm has 15 billion shares after recently issuing another five billion shares out of an increase in the company’s authorized capital stock from 10 billion to 15 billion shares. The 10 billion shares are held by PNOC, its parent company.
Aquino said EDC will follow Petron’s privatization model where PNOC retains a 40 percent stake, sell the other 40 percent to a strategic partner and offer the remaining 20 percent to the public via IPO.
In 2003, the Department of Energy (DOE) approved the request of the EDC to extend its service contract (SC) for another 25 years in preparation for company’s IPO which was originally scheduled to be held this year. PNOC-EDC’s service contract will last until 2008.
Created in 1976, EDC is one of the most profitable subsidiaries of the state-owned PNOC.