Danessa Rivera (The Philippine Star)
- April 4, 2019 - 12:00am
MANILA, Philippines — The National
Grid Corp. of the Philippines (NGCP) remains committed to undertake its
long-delayed initial public offering (IPO).
In its position paper submitted to
the Senate Committee on Energy, NGCP said it has not asked for an exemption but
sought reasonable extension of the period to conduct its maiden offering on the
Philippine Stock Exchange (PSE).
“Consistent with the performance of
its obligations under its franchise and the concession agreement, NGCP intends
to comply with the requirement of listing of shares,” NGCP said as read by
spokesperson Cynthia Alabanza in a Senate hearing yesterday.
Under Republic Act 9511 or NGCP’s
charter, the grid operator was given a period of 10 years from Jan. 15, 2009 to
comply with its statutory requirement to offer at least 20 percent of its
outstanding capital stock to the public.
The same law also allows the ERC to
grant requests for extensions, subject to certain conditions.
One of the reasons cited by NGCP for
delaying its IPO is the absence of the final determination of price control
arrangements for the fourth regulatory period.
NGCP said the final determination
sets the amount of revenues it will be allowed to recover from its consumers,
the amount of capital expenditures it can spend for its projects, and how much
operation expenses it can incur.
“Due to uncertainty in NGCP’s expected
future earnings as well as the lack of an approved capital expenditure budget
for the fourth regulatory period, NGCP can not meet the basic components for an
IPO and provide the optimum price for its shares,” she said.
“Investor confidence in NGCP’s
maiden entry into the capital market has to be established by ensuring sound
and reliable and definitive financial information to the investing public,” she
said.
During the same hearing, ERC legal
service director Gregorio Ofalsa said the agency has committed to finish the
regulatory reset for NGCP by December 2020.
Sen. Sherwin Gatchalian—who chairs
the Senate Committee on Energy—has directed the ERC to stick to its commitments
on the final determination of NGCP’s fourth regulatory period.
Because of the delayed regulatory
reset, the lawmaker said NGCP has already overcharged P46.55 billion to
consumers.
NGCP also cited the pending disputes
among NGCP, the National Transmission Corp. and the Power Sector Assets and
Liabilities Management Corp. (PSALM), which are now in arbitration, as well as
the threats from TransCo on its concession agreement.
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