SEM-Calaca Power taps P9.6-billion loan

MANILA, Philippines - A P9.6-billion project debt facility has been entered into between SEM-Calaca Power Corp. and a syndicate of financial institutions led by the Banco De Oro Unibank Inc. (BDO), Bank of the Philippine Islands (BPI), and Philippine National Bank (PNB).

SEM-Calaca is a wholly-owned subsidiary of the Consuji-controlled Semirara Mining Corp., the only large-scale coal producer in the Philippines and is engaged in surface open cut mining of thermal coal from its Panian mine on Semirara Island in Antique Province.

BDO Capital & Investment Corp. was tapped as lead arranger and sole bookrunner, while BPI Capital Corp. and PNB Capital and Investment Corp. were the other arrangers.

The proceeds from the facility will refinance loans and shareholders’ advances extended to SEM-Calaca for the downpayment of the 40-percent acquisition cost of its power plants and prepayments made to PSALM. A portion will also be used to finance working capital requirements.

SEM-Calaca Power Corp. will raise its authorized capital stock to P8 billion from P5 million to facilitate the conversion of advances to equity by Semirara Mining, its parent firm.

The company intends to acquire, expand and maintain power-generating plants, as well as develop fuel for power generation and to sell electricity to entities through electricity markets.

Late last year, it entered into an asset purchase agreement with the state-run Power Sector Assets and Liabilities Management (PSALM) for the acquisition of the two 300-megawatt (MW) Batangas coal-fired thermal power plant, including its ancillary facilities, located in Calaca, Batangas at a total cost of $361.7 million.

Under the agreement, it made advances in the nature of deposit for future subscriptions to the capital stock of SEM-Calaca in the amount of P7.107 billion. The advances represent the initial payment to PSALM for the acquisition of the two Calaca coal-fired thermal power plants.

The Consunji Group won the auction in July last year with its bid of $362 million, less than half of what French utility firm Suez paid for it in 2007.

Emerald Energy, a unit of Suez, returned the power plant to the government in January after its condition deteriorated, forcing the government to resell it a lower price amid tough economic conditions.