Wednesday, June 21, 2017

EDC may borrow P2B more to refinance debts

By Lenie Lectura - May 10, 2017

THE Lopez-led Energy Development Corp. (EDC) is looking to borrow up to P2 billion to refinance the geothermal firm’s debts.
“For borrowings, I think we recently disclosed we borrowed and signed about P8.5 billion; this is really to refinance. Maybe in the next few weeks, we will probably sign up additional P1 billion to P2 billion to refinance our existing loans,” EDC Vice President for Finance Erwin Avante said.
He said EDC’s maturing loans next year will amount to $72 million.
EDC recently offered to purchase up to $100 million of its outstanding $300-million notes due in 2021, listed on the Singapore Exchange Securities Trading Ltd.
On April 7 EDC said it accepted $65.92 million worth of valid tenders from holders of notes carrying an interest of 6.5 percent.
This, it added, is part of its “liability management exercise” so it can improve debt profile.
EDC also borrowed P3.5 billion from Union Bank of the Philippines to refinance existing loans. The facility was a fixed, 15-year amortizing loan.
EDC Chief Financial Officer Nestor Vasay said the company has capitalized on the liquid domestic financial market and successfully replaced its more expensive loans with cheaper peso liabilities, thus reducing loan-interest rates.
This financial exercise, he added, also resulted in the extension of the company’s maturities and converting bullet repayments into amortizing loans.
The company has set aside P7 billion in capital expenditure (capex) this year. This is lower than the previous year’s P8.2-billion capex.
Of the total amount, P3 billion will be used to rehabilitate the 112.5-megawatt (MW) Tongonan geothermal plant in Leyte.
About P500 million of this year’s capex would be spent to upgrade the 125-MW Mahiao plant.

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