Meralco gets P10-b BDO Unibank loan

by Jenniffer B. Austria – July 26, 2016 at 11:40 pm

from Manila Standard Today

Manila Electric Co., the biggest retailer of electricity, obtained a short-term loan of P10 billion from BDO Unibank Inc. in June to finance capital expenditures this year, a senior official said Tuesday.

“We did a short term [borrowing] last June, one year [tenure]. BDO because the rate was attractive… The capex came in, and we wanted to fund a portion of the dividends,” Betty Siy-Yap, Meralco senior vice president and chief finance officer told reporters.

She said the company might still raise funds toward the latter part of the year subject to regulatory approval.

“We’re looking at several offers of the banks. There are lots of opportunities. I think we have four right now, short term. For the long term, we’re looking at it but… we need regulatory approval for that one,” Siy-Yap said.

She said Meralco was looking at fund raising opportunities “to time it when interest rates work in our favor.”

Siy-Yap earlier said the company might raise between P10 billion and P15 billion this year to fund the company’s capex requirements.

She said the borrowings would depend on the company’s available cash flow, adding any other fund-raising could be on a per project basis, specifically with Meralco PowerGen Corp.

“The ERC [Energy Regulatory Commission] has initially heard our request but it took a while for them to come out with the decision and the period within which a provisional approval could be granted has already lapsed,” Siy-Yap said.

“And the market condition at the point also changed. We see interest rates increasing at that time, so we withdrew our request for a D-E [debt-equity] ratio but certainly we would need to borrow and we are exploring other options possible for us,” she said.

The ERC approved a P15.5-billion capex for Meralco for 2016 to improve system reliability, safety, power quality and efficiency of the distribution system.

“These significant investment outlays are reflective of our commitment to 24×7 service to Meralco customers, while being mindful of our deliverables of sustained profitability and volume accretion to our shareholders and other business partners,” Meralco president Oscar Reyes said.

Meralco’s completed projects include the expansion of the Masinag substation with the commissioning of the second 83 MVA power transformer, energization of Banawe GIS substation and development of Sitio Gitna 115 kV switching station.

Meralco serves nearly six million customers in its franchise area.