Meralco mulls another fund raising scheme

MANILA, Philippines - Power distributor Manila Electric Co. (Meralco) is contemplating on another fund-raising activity soon to fund its capital expenditures next year.

In its disclosure to the Philippine Stock Exchange (PSE), Meralco said its board “has approved the management’s plan to negotiate a financing facility with one or more financial institutions.”

Meralco, however, did not disclose details of the planned fund-raising scheme.

In an earlier interview, Meralco treasurer Rafael Andrada said “management just want to get the board approval just in case the opportunity to raise funds arises between now and next year.”

Andrada said proceeds from the financing scheme may be used for “DU (distribution utility) requirements” such as for capex.

Starting 2012, Meralco would need a capex budget of around P12 billion.

The Meralco board also gave its go-signal to plans by the distribution company and its local retail electricity supplier (RES) to enter into power supply agreements with power generation firms   South Premier Power Corp., Masinloc Power Partners Ltd. and Sem-Calaca Power Corp.

South Premier, a unit of San Miguel Corp., administers the energy output of the Ilijan power plant with total capacity of 1,200 megawatts while Masinloc is being run by American firm AES Corp. with a 1,200-MW capacity. Sem Calaca, with a 600-MW capacity, is owned by the Consunjis of DMCI.

   While still in the initial stages of negotiations and have yet to be approved by the Energy Regulatory Commission (ERC), Andrada said the supply agreements may involve about 2,000 MW capacity.

   The RES license is issued to an entity authorized by the ERC to sell, broker, market or aggregate electricity to the contestable market, in which end-users will have a choice of a supplier of electricity.

   Likewise, the Meralco board approved the power distribution utility’s plan to divest of its investment in Rockwell Land Corp.(RLC) through declaration of all of Meralco’s shares in RLC as property dividends and subsequent listing by way of introduction.

   “It would be offered to all shareholders but it has no mechanics yet,” Andrada said.