PNOC-EDC is selling between 2.12 billion shares and 2.609 billion shares through a primary offering at a price yet to be set on Dec. 2. The company has earlier indicated a price range of between P2.10 to P3.20 per share.
The local offering, on the other hand, will start on Dec. 4, while the listing of the shares has been tentatively scheduled on Dec. 13.
CLSA Exchange Capital is the sole bookrunner and underwriter for the international issuance while Development Bank of the Philippines, BDO Capital & Investment Corp., ING Bank N.V, and Land Bank of the Philippines will serve as lead underwriters for the domestic float.
In case of oversubscription, PNOC-EDC is setting aside 635 million to 783 million shares, representing up to 15 percent of the offered shares, for sale to the public.
The IPO is in line with the government’s policy to restructure and privatize the power sector to reduce its role in industries where there are private sector interests, and to further trim down its budget deficit.
Proceeds from the offering, estimated at around $300 million, will be used for the modernization and upgrading of the company’s facilities and for other capital requirements.
PNOC-EDC is setting aside P2.98 billion next year for capital expenditures, which include the Northern Luzon wind power project in Ilocos Norte. About P1.35 billion will be set aside for the first phase of the North Luzon wind power project, which involves the establishment of wind farm facilities with support equipment, related transmission lines and substation facilities, expected to be completed by the first quarter of 2009.
PNOC-EDC is also studying the feasibility of potential sites in Bayog and Nagsurot also in Ilocos Norte, which could generate 98 megawatts of wind power. Studies for both sites were funded by the German government through KfW.
In the Visayas, the company recently completed a feasibility study in Manoc-Manoc in Malay, Aklan also funded through a grant from KfW.
In Palawan and Camiguin Island, PNOC-EDC is conducting new studies through a grant from the Spanish government.
In the nine months ending September this year, PNOC-EDC has already spent P2.84 billion mainly for the construction of the Northern Negros geothermal power plant.
PNOC-EDC has earmarked around P1.04 billion until the end of the year to be used mainly for the completion of the Northern Negros geothermal power plant.
The company accounts for about 60 percent of total installed geothermal energy capacity in the Philippines, the world’s second-biggest producer of geothermal energy. It supplies fuel to 12 power plants.
Its four geothermal fields in Leyte, Negros Oriental, Bicol and Cotabato have a total capacity of 1,149.4 megawatts as of end-2005.