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MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM) reported yesterday that it had borrowed around P75 billion as part of its refinancing scheme for the debts of National Power Corp. (Napocor).
PSALM president and chief executive officer Emmanuel Ledesma Jr. said the P75-billion syndicated term loan facility (STLF) was specifically used to augment its present working capital requirements and to partially refinance its existing financial obligations as prescribed in the Electric Power Industry Reform Act (EPIRA).
PSALM is created under the EPIRA or Republic Act 9136 to handle the finances and privatization of Napocor.
“PSALM is exploring various liability management strategies to adequately address this year’s financial requirements,” Ledesma said.
He said PSALM was compelled to secure additional funding to fulfill its mandate to operate and maintain the plants still under its portfolio, which necessarily includes the unavoidable costs of fuel that PSALM has to purchase for its fuel-based plants.
Ledesma said the deferment of the asset privatization program and the inclusion of the National Transmission Corp.’s operating expenses in PSALM’s financial requirements called for the need to raise funds.
The PSALM board approved the P75-billion STLF in its Feb. 7, 2011 meeting and the corresponding utilization of the proceeds to partially address the shortfall in 2011.
This was subsequently endorsed by the Department of Finance (DOF) to enable PSALM to adequately address its financial requirements.
Ledesma said the P75-billion loan will also cover PSALM’s 2011 financial obligations, including independent power producer debts and other contractual obligations arising from the operations of the remaining unsold assets.
He added that part of the loan facility will be used to pay the P25-billion short-term loan with the Land Bank of the Philippines that fell due on May 19, 2011 as agreed upon with the DOF.
The rest of the loan facility will be used to pay maturing obligations which include the P18-billion bond secured in 2004 due in August 2011.
Ledesma said PSALM, however, still has to hurdle the shortfall in succeeding years, including the company’s working capital requirements.
To address the shortfall, he said PSALM is exploring the possibility of implementing the collection of the universal charge for stranded debts and stranded contract costs when the applications are approved by the Energy Regulatory Commission.
PSALM, he said, is also looking at accelerating the collection of receivables from the various winning bidders through prepayment and/or other financial structures within the confines of the contract.
He said the asset management firm will also support the government’s thrust of consolidating the government-owned and -controlled corporation’s debts with the National Government to minimize costs through an on-lending program.
Ledesma said they would continue to tap the capital markets for fund-raising purposes if the need arises.
PSALM president and chief executive officer Emmanuel Ledesma Jr. said the P75-billion syndicated term loan facility (STLF) was specifically used to augment its present working capital requirements and to partially refinance its existing financial obligations as prescribed in the Electric Power Industry Reform Act (EPIRA).
PSALM is created under the EPIRA or Republic Act 9136 to handle the finances and privatization of Napocor.
“PSALM is exploring various liability management strategies to adequately address this year’s financial requirements,” Ledesma said.
He said PSALM was compelled to secure additional funding to fulfill its mandate to operate and maintain the plants still under its portfolio, which necessarily includes the unavoidable costs of fuel that PSALM has to purchase for its fuel-based plants.
Ledesma said the deferment of the asset privatization program and the inclusion of the National Transmission Corp.’s operating expenses in PSALM’s financial requirements called for the need to raise funds.
The PSALM board approved the P75-billion STLF in its Feb. 7, 2011 meeting and the corresponding utilization of the proceeds to partially address the shortfall in 2011.
This was subsequently endorsed by the Department of Finance (DOF) to enable PSALM to adequately address its financial requirements.
Ledesma said the P75-billion loan will also cover PSALM’s 2011 financial obligations, including independent power producer debts and other contractual obligations arising from the operations of the remaining unsold assets.
He added that part of the loan facility will be used to pay the P25-billion short-term loan with the Land Bank of the Philippines that fell due on May 19, 2011 as agreed upon with the DOF.
The rest of the loan facility will be used to pay maturing obligations which include the P18-billion bond secured in 2004 due in August 2011.
Ledesma said PSALM, however, still has to hurdle the shortfall in succeeding years, including the company’s working capital requirements.
To address the shortfall, he said PSALM is exploring the possibility of implementing the collection of the universal charge for stranded debts and stranded contract costs when the applications are approved by the Energy Regulatory Commission.
PSALM, he said, is also looking at accelerating the collection of receivables from the various winning bidders through prepayment and/or other financial structures within the confines of the contract.
He said the asset management firm will also support the government’s thrust of consolidating the government-owned and -controlled corporation’s debts with the National Government to minimize costs through an on-lending program.
Ledesma said they would continue to tap the capital markets for fund-raising purposes if the need arises.
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