PNOC-EDC eyes P17.1 billion from secondary share offer

Geothermal power producer PNOC-Energy Development Corp. (PNOC-EDC) expects to raise about P17.1 billion from a secondary offering of shares following a hugely successful initial public offering (IPO) in December 2006.

In a disclosure to the Philippine Stock Exchange (PSE), PNOC-EDC said it has priced its offer of three billion existing common shares at P5.70 per share after a book-building exercise.    

The offered  shares represent 20 percent of the outstanding stocks of PNOC-EDC.             

According to PNOC-EDC, the offer price is a zero percent discount to the closing price of the company’s shares on the PSE on July 6, the last trading day of its shares before pricing. 

Shares of PNOC-EDC rose 12.3 percent yesterday to P6.40 each share from P5.70 Friday.         

After the follow-on offering, parent firm Philippine National Oil Co. will reduce its stake in PNOC-EDC to 47 percent.            

PNOC-EDC raised P16.7 billion from an IPO in December 2006.       

The listing of PNOC-EDC is the biggest that has been undertaken by a government-owned and controlled corporation since oil refiner Petron Corp., its sister company, went public in 1994         

The government wants to sell another 40-percent stake in PNOC-EDC within the year to raise revenues that will cover shortfalls in tax collection in the first half.                    

PNOC-EDC accounts for about 60 percent of total installed geothermal energy capacity in the Philippines, supplying fuel to 12 power plants. Its four geothermal fields are located in Leyte, Negros Oriental, Bicol and Cotabato.           

Majority or 75 percent of PNOC-EDC’s revenues comes from the sale of electricity while 23 percent is being derived from the sale of steam to power plants operated by the National Power Corp.         

PNOC-EDC has earmarked P2.98 billion for its capital expenditures this year, which include the Northern Luzon wind power project in Ilocos Norte.             

Of the proposed budget, P1.35 billion will go to the first phase development of the wind power project, which involves the establishment of wind farm facilities with support equipment, related transmission lines and substation facilities.  The first phase is expected to be completed by the first quarter of 2009.