"We have been tightening our belt since the start of the year. We have been generating savings since then equivalent to about $350 million. With this, we are thinking of bringing Napocor’s capex down to only $1.5 billion," Napocor acting president Roland S. Quilala said.
Most of the savings, Quilala said, have come from "controllable expenses and/or contingent expenditures" such as lessening the company’s local and foreign trips and training.
"These savings will enable us to forego with the supposed additional $350 million funding requirement for this year," he said.
However, he said the company will continue to pay its debts. "We cannot be remiss of our obligation to pay our creditors. There are things in our expenditure programs that can be implemented some other time. It is just a matter of setting the company’s priorities," he said.
Initially, the funding requirement of Napocor stood at $1.5 billion. But this was increased by $350 million to factors in the impact of President Arroyo’s orders to reduce Napocor’s purchased power cost adjustment and peg it a uniform rate of 40 centavos per kilowatthour (kWh).
Of the $1.5-billion financing requirement, Napocor was able to raise half by allowing the National Government, through the Department of Finance, to borrow in behalf of the corporation.
Napocor plans to raise the remaining $750 million by issuing a combination of US ($500 million) and yens ($250 million)-dominated bonds by mid-November this year.
While waiting for the bond flotation, Napocor will avail itself of some $250 million to $400 million bridge financing from four banks: Citibank N.A./Salomon Smith Barney Hong Kong Ltd., Sumitomo Bank, Standard Chartered Bank and Credit Lyonnais.