PSALM cuts debt to P574b

by Alena Mae S. Flores – November 19, 2015 at 11:30 pm

from Manila Standard

Power Sector Assets and Liabilities Management Corp., the agency in charge of selling the government’s energy assets, said it trimmed its financial obligations to P574.9 billion as of end-March from a peak of P1.241 trillion in 2003.

PSALM, which manages the assets and liabilities of National Power Corp.,  said in a report it reduced the liabilities by contin implementing a liability management program and strategies.

“This reduction amounting P665.68 billion is attributable to the lower BoT [build-operate-transfer] lease obligations and debt balances which were brought about by the privatization of some IPP [independent power producer] plants and payments of maturing obligations,” the agency said.

The government transferred Napocor’s assets and debts of PSALM in 2008.

The total asset balance transferred to PSALM amounted to P831 billion as of Dec. 31, 2008, while total liability balance was P904.8 billion.

PSALM said privatization efforts generated $19.878 billion as of the first quarter this year.

The agency said of the amount, actual collection amounted to $9.577 billion, while the balance of $10.30 billion remained to be collected.

The agency has yet to collect bulk of the privatization proceeds from the independent power producer administrator privatization amounting to $7.744 billion.

The remaining $2.557 billion is to be collected from the transmission business privatization.

PSALM said that as of first quarter, the entire proceeds from the privatization of the power generating assets amounting to $3.534 billion had been collected.

Proceeds from the sale of the decommissioned plant were also collected.

“Of the $8.797-billion privatization proceeds utilized, $8.689 billion or 98.77 percent was used for the liquidation of financial obligations. The difference between the total amount collected and total utilization in the amount of $0.78 billion is placed in temporary investments while awaiting utilization,” PSALM said.

PSALM said it used $1.298 billion of the privatization proceeds for debt repayment, $4.979 billion for regular debt service, $2.412 billion for BOT lease obligations, $0.107 billion for privatization related expenses and $0.001 billion for operations expenses of the National Transmission Corp.