Calaca raises capital to P1B

Calaca High Power Corp., a member of the consortium that won the right to run the national power transmission system, is beefing up its capitalization to P1 billion from a meager P1 million.

Formed in December 2006, Calaca High is headed by businessman-stockbroker Robert Coyiuto Jr. and Pedro Goza. It operates, maintains and rehabilitates energy systems and services for gas, steam and electricity.

Out of the total capital increase, P249.75 million has been subscribed and P150 million paid for by Coyiuto.

Calaca High is part of the National Grid Corp. of the Philippines (NGCP) which also comprises local firm Monte Oro Grid of businessman Walter Brown, and State Grid Corp. of China.

NGCP beat an offer of $3.905 billion from Southeast Asia’s largest food and beverage conglomerate San Miguel Corp. and partners Amsterdam-based TPG Aurora BV and Malaysian utility Tenaga Nasional with its winning bid of $3.95 billion.

Monte Grid is a wholly owned unit of  Monte Oro Resources & Energy Inc., to invest and hold interest in shares of stock of companies engaged or proposing to engage in infrastructure projects.

State Grid Corp. of China, on the other hand, was organized from the assets of the State Power Corp. of China which has been authorized by China’s State Council to operate power transmission, transformation, distribution and other assets of power grids.

A legislative measure granting a franchise to NGCP was approved on second reading at the House of Representatives Wednesday. NGCP has an authorized capital stock of P2 billion, P500 million of which was paid-up.

House Speaker Prospero C. Nograles, one of the principal authors of the bill, said the bill was prioritized given the need to rehabilitate the country’s ageing transmission system.

The rehabilitation, he said, would help stabilize power rates as he noted the exorbitant costs of power.

Nograles, likewise, noted that NGCP has the technical and financial capacity to run the operation, construction, expansion, and maintenance of hugely capital-intensive power-generating plants, transmission and subtransmission systems in the country.

“Once turned over to a private sector, the transmission system can be run with greater reliability and improved system security, thus resulting in a more stabilize power rates,” Nograles said.

He said the bill has been scheduled for final approval as soon as Congress opens its second regular season in July.

NGCP has until December this year  to get a Congressional franchise to operate the power transmission system. Should it fail to obtain a franchise, the bidding would be declared a failure and PSALM would reimburse the group’s expenses of as much as $5 million.

The consortium earlier said it might tap the international debt market to fund the acquisition of its bid.

Under the terms set by the government,  NGCP will pay 25 percent of the bid price upon the approval of the franchise with the balance to be amortized over 20 years at an interest rate of 12 percent a year.

The group has an option to  prepay the amount.