Capital raising for power firms now easier, says SEC

POWER generation companies and distribution utilities (DUs) can now raise FRESH FUNDS WITH LESS DIFfiCULTY FROM A PUBLIC OFFERING THROUGH A SIMPLIfiED REGISTRATION PROCESS, the Securities and Exchange Commission (SEC) SAID ON FRIDAY.

SEC Memorandum Circular 4, Series of 2024, issued on February 15 but only made available on Thursday, provides guidelines for Securing and Expanding Capital for PowerGen Operators and Wholesale Electricity and Retail Services (Sec Powers).

Under Section 43(t) of Republic Act 9136, or the “Electric Power Industry Reform Act (Epira) of 2001,” private power generation firms and DUs are required to offer and sell at least 15 percent of their shares to the public.

“The simplified procedure supports the policy of the state to enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors, as provided under the Epira Law,” the SEC explained.

The commission, through its

Markets and Securities and Regulation Department (MRSD), is expected to finish the review of registration statements within 45 days from filing, in compliance with the Securities Regulation Code and the Revised Corporation Code of the Philippines.

Following en banc approval, the MRSD should then issue a pre-effective letter outlining the conditions to be complied with by power generation companies and DUs.

“Upon complying with the conditions, the MSRD shall issue the order of registration and/or permit to sell securities to the public,” the corporate regulator continued.

“The public offering and sale of the securities may then commence within 10 business days from the date of the effectivity of the registration statement,” it added.

The agency noted that the Sec Powers also waived the 20-percent minimum public float requirement for listed companies, as stated in SEC Memorandum Circular 13, Series of 2017, favoring the 15-percent minimum requirement under Epira.

“A registrant corporation may choose not to engage an underwriter for the public distribution or offering of its shares, provided that it has secured approval from the SEC by demonstrating that it has the ability to sell all or substantially all of its securities to the public,” it said.

Companies, the SEC added, may also offer securities in tranches to be issued on “a continuous or delayed basis for a period not exceeding three years from the effective date of its initial shelf registration statement.”