Semirara unit borrows P11.5B for Batangas power plant project

MANILA, Philippines - A unit of Consunji-led Semirara Mining Corp. has downsized its borrowing program from three banks to P11.5 billion from P14 billion, the company said in a disclosure yesterday.

Southwest Luzon Power Generation Corp. signed Friday the loan agreement with BDO Unibank Inc., Bank of the Philippine Islands and China Banking Corp., Semirara said.

The decline in expenditures was due to “lower cost and higher equity,” Semirara chief executive Isidro A. Consunji said in a text message.

BDO Capital & Investment Corp. was the lead arranger for the loan facility.

Proceeds from the term loan will be used by Southwest Luzon Power for the design, engineering, construction and operation of the two 150-megawatt (MW) coal-fired thermal power plant in Calaca, Batangas.

The new power plant will be built adjacent to the current two 300-MW coal-fired thermal power plant owned by subsidiary SEM-Calaca Power Corp.

Under the loan agreement, Semirara pledged 67 percent of voting shares in Southwest Luzon Power to the three lenders.

Semirara said it will guarantee the repayment of all obligations of Southwest Luzon Power in the debt deal.

Shareholders of Semirara will also finance construction and cost overruns through equity or subordinated loans, it added.

Consunji said the total project cost is $425 million.

The 600-MW Calaca facility is designed to run as a base-load plant using local coal from Semirara Island. The plant, which is fully-owned by Semirara, started rehabilitation in August 2010 and is targeted for completion by March or April next year.

DMCI Holdings Inc., the parent firm of Semirara, won the bidding for the Calaca coal fired facility in July 2009 with its offer of $361.7 million (roughly P17 billion).

The expansion of the power plant is in line with the group’s objective of churning out a total of 1,550 MW of power by 2013.