Napocor to raise planned foreign borrowing to $400M

National Power Corp. (Napocor) president Jesus N. Alcordo said yesterday they are exploring the possibility of increasing the amount of their planned foreign borrowing in August to $400 million from the original $300 million.

Alcordo said they will be coming out with "a shortlist of financial institutions to be considered for this borrowing exercise." "We need to decide very soon. By August we need to come up with the money to finance our maturing obligations," he added.

Alcordo said they have actually considered raising a minimum of about $150 million and a maximum of $400 million for its borrowing requirement this year.

Aside from financing its maturing debts, Alcordo said part of the borrowings will be used to finance its capital cost.

"We are still studying what kind of borrowing scheme to use. But we will come up with a shortlist very soon," he said.

By November this year, Napocor would have to settle a $144-million loan with the ING Bank. For this year, the company needs some P112.31 billion for its operating expenses.

The state-owned power firm is evaluating funding proposals submitted by at least 16 investment banks. The Napocor will shortlist only three from these banks.

Napocor prefers its borrowings to be guaranteed by the National Government, to have at least a three-year maturity and a fixed interest rate.

The passage of the Power Reform Act is expected to boost investors confidence on Napocor’s credit worthiness.