Diversified conglomerate San Miguel Corporation reported that its subsidiary SMC Global Power Holdings Corp. is planning to buy back $400 million worth of its US Dollar-denominated senior perpetual capital Securities through a tender offer.

In a disclosure to the Philippine Stock Exchange, SMC said the conduct of the tender offer was authorized by the Board of Directors of SMC Global Power.

The tender offers for an aggregate principal amount of up to $400 million will be made to the holders of the US Dollar-denominated senior perpetual capital securities that are listed with the Singapore Exchange Securities Trading Limited (SGX-ST).

In June and September 2021, SMC Global Power raised $600 million and $150 million, respectively, from the issuance of senior perpetual capital securities which were listed in the Singapore bourse.

The net proceeds from both issuances were used primarily for investments in the firm’s 1,313.1 MW Batangas Combined Cycle Power Plant and related assets or for general corporate purposes.

SMC Global Power stressed that the net proceeds will not be applied to finance any of the Company’s planned coal-fired power plants.

Meanwhile, SMC Global Power is targeting to resume the operation of its 1,200-megawatt Ilijan gas-fired power facility by February next year to help shore up supply in the Luzon grid within the summer months.

SMC President and CEO Ramon S. Ang said the power plant’s return to operation will be synchronized “with the availability of LNG (liquefied natural gas) that will be brought into the country at the time.”

He noted that the floating storage unit (FSU) that will cater to the gas requirements of the Ilijan plant will already be in operation within that timeframe next year, as has already been advised to the Department of Energy.

“That (Ilijan plant) will run by February. The LNG import terminal will already be operational by then,” he stressed.

Ang said that, when tight supply will reign in markets during the summer months, the Ilijan plant could be strategically positioned as a “must run unit” or the facility that can be called upon for dispatch by the system operator when there is sudden spike of power demand in the grid.

The Ilijan plant of the San Miguel group has a lease agreement as anchor end-user of the offshore LNG import facility that is being set by up Atlantic, Gulf & Pacific Company (AG&P), one of the project-sponsors of LNG projects that had been granted with a permit to construct, expand, rehabilitate and modify (PCERM) by the energy department.

The gas import facility initially targeted to reach commercial commissioning this year, but given surging international gas prices and the impact of the pandemic, the project’s completion had been stretched to first quarter next year.