Meralco eyes $250-300 M bonds to finance capex

MANILA, Philippines - Manila Electric Co. (Meralco), the country’s biggest power distributor, is eyeing to issue US dollar bonds of up to $300 million to finance its capital expenditure requirements.

Meralco chief finance officer Betty Siy-Yap said while the company has not set a specific amount for the planned transaction, she said it would be a benchmark size of “anywhere between $250 million and $300 million.”

She said proceeds would be used for Meralco’s capex needs. The final transaction date would depend on market conditions.

“We continue to monitor the market for the interest while we have not priced,” Siy-Yap said.

The planned dollar bond issue comes after Meralco earlier embarked on an investor roadshow in Singapore and Hong Kong. It is also distinct from the plan to issue P20 billion in long-term peso bonds, which would be used to refinance existing debts.

Meralco earlier mandated Citigroup to arrange a series of fixed-income investor meetings in Singapore and Hong Kong for the dollar bonds issue.

Officials earlier said the company has allotted P13 billion for capital expenditures this year from P10.3 billion last year.

The company expects to post a consolidated core net income of P17 billion this year, higher than the P16 billion posted last year.

In the first half of the year, Meralco reported a consolidated core net income of P9.2 billion, two percent higher than the P9 billion posted in the first half of last year.

However, its consolidated reported net income of P9.4 billion in the first half of the year is three percent lower than year-ago level, as a result of sales of Meralco’s shares in Rockwell last year.

Consolidated revenues stood at P141.7 billion in the first six months of 2013, one percent lower year-on-year partly because of lower generation cost from power sales agreements.

Total electricity sales volume, meanwhile, grew four percent year-on-year to 16,863 gigawatt-hours during the period.