PSALM trims debts further by additional P12.4 B to P423.9 B

Published October 5, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/10/05/psalm-trims-debts-further-by-additional-p12-4-b-to-p423-9-b/

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) was able to trim its debts further by additional P12.4 billion in just three-month span to P423.9 billion in July from a heftier level of P436.3 billion as reported in April this year.

Based on data from the company, total debts still hover at P262.1 billion; while lease obligations with independent power producers (IPPs) sum up to P161.8 billion.

Further, the balance of privatization proceeds that the government-owned company still has to collect will be at P338.73 billion, which is manifestly not enough anymore to fully settle remaining power sector liabilities.

For the multi-year divestments of NPC power assets, PSALM logged total proceeds of P910.16 billion – and of that, P571.43 billion had already been remitted – including interest payments on deferred portion of the concession fees for the privatized transmission assets.

Essentially, it has been shown that if liability management will just fully depend on the power assets’ privatization proceeds, PSALM is short by roughly P85 billion now on total cash it needs to settle outstanding financial obligations.

With privatization of the remaining assets not really moving as they had been anticipated, the state-run company is seen in a bind as to how it can raise additional money to wipe out remaining liabilities – especially so since its corporate life is only limited until 2026.

There are still power assets on PSALM’s portfolio that can be privatized moving forward – but the company has been hurdled with array of concerns, including legal setbacks on ownership of some assets; and the other would be ascertaining divestment mode that could hike the assets’ privatization values.

Data from the company would show that the remaining proceeds yet to be fetched from the concession fees of the privatized transmission facilities had been down to P84.48 billion – and the bulk of P182.32 billion had already been remitted to PSALM.

Revenues raked in from the divestment of the generation assets of the National Power Corporation – which had been placed at P162.23 billion had so far been fully collected, according to the state-run firm.

In the coming years, the company can just primarily lean on revenue stream flow from the privatized supply contracts of the IPPs – which would still have estimated remittance of P256.25 billion.

Of the aggregate P482.50-billion proceeds from the appointments of independent power producer administrators (IPPAs) to the IPP contracts of state-run NPC, PSALM data indicated that P226.25 billion had already been collected. “Total collections of P571.43 billion as of March 2019, including interest income on placements, were exclusively utilized for the liquidation of financial obligations amounting to P624.80 billion as of March 2019,” the government-run firm said.

Apart from power assets, PSALM is also lining up the sale of several real estate assets but these have yet to make real contribution into the company’s top and bottom lines.