SMC power unit lists P15-B bonds; new plants to boost profitability

by Myrna Velasco – July 11, 2016

from Manila Bulletin

The profitability of San Miguel Corporation’s (SMC) power unit will be shored up this year with additional capacities coming on-line that will further beef up its portfolio as the country’s leading electric generation company.

This was noted by company executives on the listing of the P15-billion bonds issue of SMC Global Power Holdings Corporation at the Philippine Dealing and Exchange Corp.

The proceeds of the bond offer will be used to refinance debts that were utilized to bankroll the conglomerate’s array of power expansion projects.

In an interview with reporters, SMC deputy chief financial officer Joseph Pineda noted that the new capacities of power plants coming on stream this year will definitely boost both their revenues and bottom line. No figures were provided.

The company executive further indicated that another funding raising will be due for SMC this year, which is also in the vicinity of P15 billion. Nevertheless, he emphasized that it will no longer be for power but with another subsidiary.

He has not given definitive timeframe yet and where the proceeds of the scheduled bond float will be funneled eventually.

Meanwhile, SMC Global Power’s P15-billion bond sale will have tenors of five, seven and 10 years – or more specifically, these will be due on 2021, 2023 and 2026.

The joint issue managers, joint lead underwriters and bookrunners have been BDO Capital & Investment Corporation; BPI Capital Corporation; China Bank Capital Corporation; Maybank ATR Kim Eng Capital Partners, Inc.; PNB Capital and Investment Corporation; RCBC Capital Corporation; SB Capital Investment Corporation; Standard Chartered Bank; and United Coconut Planters Bank.

In her message during the PDS listing, SMC Global Power Holdings General Manager Elenita D. Go indicated that their company is moving headway with planned expansion projects to help underpin the country’s economic growth.

“We will continue to build more power plants to meet the needs of a growing economy and contribute towards nation-building,” she said.

SMC president Ramon S. Ang previously told reporters that the company may inject additional $4.2 billion for new power projects that they have already blueprinted along sites in Luzon and Mindanao grids.

Go emphasized that the main focus of their present capacity build-up are their greenfield power plant developments in Limay, Bataan and Malita, Davao.

She added the “commercial operation of these power plants will begin end-2016 until 2019.” The first unit of the 600-megawatt Davao plant is already undergoing commissioning and testing.