Meralco gets P75-B loan to boost LNG venture
Manila Electric Co., the country’s largest private electric distribution utility, will take out P75 billion worth of loans from three major local banks, mainly to back its liquefied natural gas (LNG) investment.
Meralco, which also has a sizable power generation portfolio, told the local bourse on Tuesday that it has a credit facility with BDO Unibank Inc., Bank of the Philippine Islands, and Metropolitan Bank and Trust Co.
The loan agreement should be settled in 12 years, the firm noted.
According to Meralco chief financial officer Betty Siy-Yap, the fresh funds would “be drawn within the week.”
Project Chromite
The company said in the filing that the money would “finance investments and other general corporate purposes” of the group.
Meanwhile, in a message to reporters, Yap said this would be used “for the acquisition of investments in Project Chromite.”
Early last year, the units of Meralco and Aboitiz Power Corp. agreed to form a joint venture, where Meralco PowerGen Corp. (MGen) would take a 60-percent stake in Chromite Gas Holdings Inc. (CGHI), while Aboitiz-led Therma NatGas Power Inc. would hold the remaining 40 percent.
Through CGHI, they will invest in the 1,278-megawatt (MW) Ilijan gas-fired power plant of San Miguel Global Power Holdings Corp. (SMGP), as well as an upcoming 1,320-MW combined cycle power facility.
$3.3-B deal
This, as the power titans, including SMGP, signed a $3.3-billion deal for the launch of the “first and most expansive” LNG facility in the Philippine market.
In December, the Philippine Competition Commission gave its green light to the transaction involving MGen, AboitizPower, and SMGP.
Following this decision from the competition watchdog, the Energy Regulatory Commission said it would also conduct a separate review of the deal to check its impact on market share limitations.
Under the Electric Power Industry Reform Act, no firm or related organization can own, operate, or control more than 30 percent of the installed generation capacity of a grid and 25 percent of the national installed generation capacity.
