GOVERNMENT-RUN Power Sector Assets and Liabilities Management Corp. (Psalm) has secured a P75-billion syndicated loan facility to address funding requirements for the year.
Psalm in a statement said the loan will help augment its working capital requirements and will help pay existing financial obligations as prescribed in the Electric Power Industry Reform Act.
“Psalm is exploring various liability management strategies to adequately address this year’s financial requirements,” president and CEO Emmanuel Ledesma Jr. said.
Ledesma added that the deferment of the asset privatization program and the inclusion of the National Transmission Corp.’s operating expenses in Psalm’s financial requirements called for the need to raise funds. The board approved the P75-billion loan facility early this year..
Psalm said the Department of Finance endorsed the facility to enable it to adequately address its financial requirements. The loan will be used solely to cover this year’s financial obligations, including independent power producer debts and other contractual obligations arising from the operations of remaining unsold assets.
Ledesma added that part of the funds will be used to pay the P25-billion short-term loan with the Land Bank of the Philippines that fell due on May 19. The remainder of the said loan will be used to pay maturing obligations that include the P18-billion bond secured in 2004 and due in August.
Ledesma stressed that Psalm still has to hurdle the shortfall in succeeding years, including the company’s working capital requirements. To address this, Ledesma said the Psalm is exploring all possible means to implement the collection of the universal vharge for stranded debts and stranded contract costs when the applications are approved by the Energy Regulatory Commission; accelerate the collection of receivables from the various winning bidders through prepayment and/or other financial structures within the confines of the contract; support the government’s thrust of consolidating the government-owned and –controlled corporation’s debts with the national government to minimize costs through an on-lending program; and tap the capital markets for fund-raising purposes.
Psalm further noted that it will resume the government’s privatization program in the second semester of the year.
Ledesma said Psalm aims to start the bidding process for the Naga complex independent power producer administrator (IPPA) by September, which will be followed by the bidding for the appointment of the Casecnan IPPA and the privatization of power barges 101 to 104 in the fourth quarter.
