Power firms get 1-year extension on mandatory public share offer

By Danessa Rivera (The Philippine Star) | Updated July 7, 2016 - 12:00am

http://www.philstar.com/business/2016/07/07/1600217/power-firms-get-1-year-extension-mandatory-public-share-offer

MANILA, Philippines – Private power generation companies (gencos) and distribution utilities (DUs) are given a one-year extension to comply with the rule to sell at least 15 percent of common shares to the public, as required by the law.

The Energy Regulatory Commission (ERC) in a resolution decided to extend the compliance period of gencos and DUs not publicly-listed for one year, or until June 29, 2017, “to offer and sell to the public a portion of not less than 15 percent of their common shares of stocks.”

The new resolution suspends a prior one which directed all private gencos and DUs to sell a portion of at least 15 percent of common shares to the public in a period of five years.

The directive was published on June 14, 2011 and took effect on June 29, 2011. The five-year period was supposed to end on June 29, 2016.

The extension of compliance period followed the petitions made by the Private Electric Power Operators Association (PEPOA).

“The Commission, in order to afford all affected parties the opportunity to comply with the requirement, has resolved, in lieu of suspending the effectivity of Resolution No. 9, Series of 2011, to extend for one year the compliance period provided in said resolution pending final resolution on the petition,” the ERC said.

The ERC will rule accordingly once a comprehensive study of PEPOA’s petition has been made, ERC spokesperson Floresinda Digal said in a text message.

PEPOA first sought clarification from the ERC on July 4, 2011, asking the commission “whether registration of common shares at the Securities and Exchange Commission (SEC) was inadvertently omitted as a mode of public offering.”

The group filed another petition before the ERC on Oct. 13, 2015, asking the power regulator to include the registration in the SEC “be included among the modes of public offering allowed.”

Pending resolution on its plea, PEPOA again filed a letter with the ERC on Feb. 24, 2016, asking confirmation whether the 2011 resolution will be enforced.

Under Section 43 of the Electric Power Industry Reform Act (EPIRA) of 2001, the ERC was mandated to “ensure the successful restructuring and modernization of the electric power industry” which includes the requirement on gencos and DUs to sell 15 percent of their common shares to the public.