Meralco to refinance 111.5-B maturing loans

Power utility giant Manila Electric Company (Meralco) is intending to secure new loans to refinance 111.5 billion worth of notes falling due next year.

According to Meralco Chief Financial Officer Betty Siy-Yap, the notes were issued in 2013 with a seven-year maturity, but there is a put option for it in 2019.

She indicated the company is now exploring several options on the planned refinancing of the facility – including prospective long-term loan procurement.

The recourse being weighed by the power firm will include tapping preliminary into internal funds to settle such obligation or tap short-term financing.

Yap explained though that shortterm financing “could be very expensive,” hence, that might not exactly be the direction they would be heading to.

She added long-term refinancing will be most beneficial, but she emphasized that accessing such facility would require them to apply for a debt-to-equity (D/E) ratio with the Energy Regulatory Commission.

Nevertheless, she qualified that while the company preps on to securing regulatory approval on a D/E ratio, tapping into internally generated cash could be the immediate possibility.

“We will apply for a D/E ratio, but while waiting for ERC approval, we may tap into our internal funds,” Yap said.

The utility firm is still at its pace of aggressive expansion – primarily in upgrading and enhancing the capacity of its distribution network.

And while the regulatory go-signal on their capital expenditures (capex) application had just been partially granted, Yap indicated that they have been continually seeking separate approvals for emergency capex.

For the first half this year, she said the company already rolled out 13.0 billion worth of emergency capital outlay, and that had so far been ramped up to 14.0 billion.