Sources said the Bangko Sentral ng Pilipinas (BSP) has approved Napocor’s request to issue the bonds, the proceeds of which will go to its interim financing needs.
The sources said the mechanics of the bond are still being finalized, but added this could be in the form of special series Treasury bills with a short-term maturity of possibly, three months.
It is still also not clear if Napocor would be undertaking the bond issuance on its own, or if the Department of Finance will borrow on its behalf which sources said, will be cheaper for government.
The soon-to-be privatized Napocor earlier said it is mulling the sale of at least six of its gas turbines to reduce government’s foreign borrowings for its $530-million financing requirement for the year.
Previously, Finance Secretary Jose Isidro Camacho who is also concurrent Napocor chairman said the state-run firm will "piggyback" on the scheduled foreign borrowing of the National Government.
Camacho said government will be assuming about 40 to 60 percent of the financing requirements of Napocor which was originally reported to be about $350 million. It turns out however, that the state run firm needs more than that.
Analysts said Napocor needs to piggyback on government borrowing because creditors are wary about extending new loans to the debt-saddled state firm.
With no new capital infusion and struggling with huge debts and amid privatization process, creditors consider lending to Napocor too risky, analysts said.
Meanwhile, Napocor is expected to incur about P4 billion to P5 billon net loss this year, way below the earlier projection of P16 billion.
Napocor president Jesus N. Alcordo said if they would be able to sustain their performance in the first half of the year, there is a possibility that their losses would be trimmed down significantly.
"We expect to sustain our performance in the remaining months of the year," Alcordo said, explaining his optimism on the company’s financial health.
He added that they would try to implement the same financial discipline they have carried out in the first semester of 2001. "If we achieve what we have done in the first six months of the year, we will be able to cut down on our losses," he said.
He said they expect Napocor’s losses to reach only P2 billion in the first six months of 2001, a little over the P1.93 billion incurred in the first five months of the year. — Rocel Felix and Donnabelle Gatdula