Meralco to tap P75 billion credit facility

MANILA, Philippines — Tycoon Manuel V. Pangilinan’s Manila Electric Co. (Meralco) is borrowing up to P75 billion this week from a consortium of the country’s top private banks to finance its joint venture with Aboitiz Power Corp.

In a regulatory filing yesterday, Meralco said it would draw from its “P75 billion credit facility” with BDO Unibank Inc., Bank of the Philippine Islands and Metropolitan Bank and Trust Co. “within the week.”

Meralco said the loan, which is payable in 12 years, will be used to bankroll its investments and other general corporate requirements.

Meralco chief finance officer Betty Siy-Yap said the company would use the funding for the “acquisition of investments in Project Chromite.”

This followed the investment deal between Meralco PowerGen Corp. (MGen) and Aboitiz-owned Therma Natgas Power Inc. (TNPI) for the acquisition of equity interest in Chromite Gas Holdings Inc.

MGen owns 60 percent of Chromite Gas, while TNPI holds the remaining 40 percent.

Through their joint venture, MGen and TNPI intend to invest in two gas-fired power plants owned by tycoon Ramon Ang’s San Miguel Global Power Holdings Corp. (SMGP).

As part of the deal valued at $3.3 billion, Chromite Gas and SMGP will also buyout Linseed Field Corp., which operates a liquefied natural gas (LNG) terminal in Batangas.

Late last year, the parties secured the green light from the Philippine Competition Commission for their LNG deal, a landmark development aimed at ensuring energy security and expected to bring down power costs.

“This partnership highlights the shared vision of MGen, AboitizPower and SMGP to address the growing energy needs of the Philippines while promoting transparency, fairness and long-term sustainability in the energy sector,” the energy giants said in a joint statement.

MGen is the power generation unit of Meralco, while AboitizPower, which holds the power business of the Aboitiz Group, owns TNPI.

SMGP, meanwhile, is the energy arm of conglomerate San Miguel Corp.