PSALM president Edgardo Del Fonso, said in an interview, that the $400 million will form part of the total $1 billion financing requirement of Napocor for 2002.
The $400-million bond float, to be handled by US-based Bear Sterns, was supposed to be raised this year to finance part of the $530-million gross financing needs of Napocor for 2001.
Sources said the planned bond float was jeopardized by Napocors failure to secure reinsurance coverage which is one of the major concerns of creditors and investors before granting a loan or investing in a firm.
But Del Fonso explained that PSALM need not raise the entire $1 billion for Napocor. "It will depend on how much we will be able to raise from the sale of Napocor assets," he said.
PSALM estimates it will generate from $2.4 to $2.7 billion from the sale of Napocors transmission assets and from $5 to $7 billion its generation assets.
Based on the privatization plan submitted by PSALM to the Joint Congressional Power Commissions, the sale of the transco assets will be carried out in the second quarter of next year while the privatization of generation assets will follow in the second half of 2002.
"If we could raise the $1 billion from the sale of Napocor assets, then we need not borrow anymore," he said, when asked if they need to raise the amount even though they already expect to earn from the privatization of Napocor.
According to Del Fonso, PSALM is also busy restructuring the maturing obligations of Napocor. "We need to buy some time until we get the long-term financing to pay off these maturing debts," he said.
He said they have been stretching out some of these maturing loans to longer terms. "We have to find the funds to finance it," he said.
Under the new Power Law, PSALM will absorb the assets and liabilities of Napocor.
The newly-formed entity will then need to look for funds to refinance maturing debts of the state-owned powers producer.