PSALM borrows P75B for Napocor’s needs

Manila Times.net

BY James Konstantin Galvez Reporter

STATE-RUN Power Sector Assets and Liabilities Management Corp. (PSALM) has borrowed P75 billion to address the shortfall in the working capital requirements of National Power Corp. (Napocor).

Emmanuel Ledesma Jr., PSALM president and chief executive, said the company has been cleared to resort to a syndicated term loan facility to augment its working capital requirements and partially refinance Napocor’s financial obligations.

“We are currently exploring various liability management strategies to adequately address this year’s financial requirements,” Ledesma said.

Created under Republic Act 9136 or the Electric Power Industry Reform Act, PSALM is mandated to handle the finances and privatize the power plants of Napocor.

Ledesma said the deferment of the asset privatization of Napocor, and the inclusion of the operating expenses of National Transmission Corp. in PSALM’s expenses, compelled the agency to secure additional funds to fulfill its mandate.

On February 7, the PSALM board approved the P75 billion loan facility.

Ledesma said that part of the loan facility—as agreed upon with the Department of Finance—will be used to pay some P25 billion in short-term loans owed to the Land Bank of the Philippines and had been due May 19.

The remaining amount will be used to pay maturing obligations, including the P18 billion bond PSALM issued in 2004 and due by August.

Ledesma said PSALM will have to hurdle the shortfall in its finances in the coming years, adding that the agency is exploring various options, including the possibility of collecting the universal charge for stranded debts and contract costs.

He said that they are just awaiting approval by the Energy Regulatory Commission.

PSALM is also looking at accelerating its collection of receivables from winning bidders of Napocor power plants and contracts with third-party generating companies.