PNOC inks $175-M loan for Malampaya gas project

State-owned Philippine National Oil Co. (PNOC) signed yesterday the $175-million syndicated loan to refinance its investment in the $4.5-billion Malampaya deep water gas-to-power project.

In a speech, PNOC president Thelmo Y. Cunanan said 14 banks and financial institutions led by Standard Chartered Bank formed the consortium. The other members are: Citibank, KBC Bank, Chinatrust Philippines, The International Commercial Bank of China, United World Chinese Commercial Bank, Security Bank, Land Bank of the Philippines, Taiwan Cooperative Bank, Allied Bank, The Arab Investment Co., the Bank of Nova Scotia, DZ Bank, and the Bank of Communications, and China Construction Bank

In early 2000, PNOC’s subsidiary PNOC-Exploration Corp. (EC) invested a 10-percent equity in the Malampaya project in Northwest Palawan.

PNOC’s investment in the project was made possible through a $130-million one-year bridge financing by Citibank in 2000, and a $175- million three-year refinancing in 2001 also by Citibank, which will mature in March 2004.

The new refinancing facility signed yesterday will have a term of up to five years.

EC was supposed to offer its shares to the public through an initial public offering (IPO) or a strategic sale in the last quarter of 2002. But due to a weak market, the company decided to suspend the plan following the advice of its financial advisor.

As part of its preparation for the IPO, EC has formally formed a new subsidiary PNOC Malampaya Production Corp. (PNOC-MPC) to represent the 10-percent stake of EC in the Malampaya project.

The creation of PNOC-MPC will pave the way for the planned IPO of 49 percent of the 10 percent share of EC in the Malampaya consortium within this year.

Some $175 million worth of debts of EC related to the Malampaya share will also be transferred to PNOC-MPC.