Transmission firm National Grid Corporation of the Philippines (NGCP) is scheduling P440 billion worth of investments that will be funneled to 211 projects to be concretized in a span of more than a decade.
According to the company, the capital outlay will be spread over 13 years that will “support the growing electricity demand in the country and to make the country’s power backbone continuously reliable.”
Part of the funding will be sourced from the proceeds of the follow-on offering (FOO) of Synergy Grid & Development Phils Inc. (SGP), which serves as the holding company that has controlling stake in NGCP.
“NGCP shall utilize the proceeds from the issuance of the non-voting preferred shares to finance its capital expenditure requirements and related cost and expenses,” SGP emphasized.
The FOO of Synergy Grid entails the issuance of 1,053,000,000 primary common shares – with an overallotment option of up to 101,000,000 shares – and these have been priced at P12 per common share.
SGP Chairman Henry T. Sy Jr. stated that the follow-on offering of the company “was priced at a very attractive level,” and such “provides everyone with an avenue to invest in NGCP,” which is the sole concession-holder of the country’s power transmission backbone.
Sy added with the investing public availing of SGP’s common shares in the FOO, “we become long-term partners in supporting the country’s growth and development.”
The offer period for SGP’s follow-on stocks listing will run from October 26, 2021 until November 2, 2021; and the listing of the shares with the Philippine Stock Exchange (PSE) will be on November 10 this year.
Tapped as joint global coordinators and joint bookrunners for the listing are BofA Securities and UBS; while BDO Capital is the sole domestic coordinator and is also the joint domestic lead underwriter and joint bookrunner, together with BPI Capital and PNB Capital.
NGCP has a 25-year concession contract with the Philippine government to operate and manage the country’s power transmission system. That deal started in January 2009 and will end in January 2034; and the concession agreement can be extended on mutual consent of both parties.
In its role as a concessionaire of the power transmission network, NGCP has been investing for the expansion as well as upgrade of facilities, so the backbone of the electricity system can viably and efficiently support load and demand growth of end-users.
And in the ‘energy transition pathway’ being traversed by the Philippine power market, the role of the transmission operator is also very critical, primarily in integrating massive renewable energy capacities in electricity grids.