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Manila Bulletin devider Business devider SEC simplifies registration process for stock offering of power firms

SEC simplifies registration process for stock offering of power firms

Published Feb 27, 2024 01:08 am

At A Glance

  • As specified under the Electric Power Industry Reform Act (EPIRA) as well as the corresponding resolutions of the ERC, the power firms are mandated to "offer and sell to the public a portion of not less than fifteen percent (15%) of their common shares of stocks."

The Securities and Exchange Commission (SEC) has simplified the registration process for power companies opting for initial public offering (IPO) and other forms of stock offering that they will be pursuing at the local bourse.

According to the Energy Regulatory Commission (ERC), the streamlined process for public offering requirements (POR) of the generation companies (GenCos) as well as distribution utilities (DUs) had been institutionalized via SEC Memorandum Circular No. 4, Series of 2024.

Through the collaboratively-framed “Securing and Expanding Capital for PowerGen Operators and Wholesale Electricity and Retail Services (SEC POWERS)” precept, the ERC stated that the system will facilitate “the process of registering securities for sale to the public and is a significant development towards ensuring compliance with the POR.

As specified under the Electric Power Industry Reform Act (EPIRA) as well as the corresponding resolutions of the ERC, the power firms are mandated to “offer and sell to the public a portion of not less than fifteen percent (15%) of their common shares of stocks.”

That has been one of the reform processes under the power industry reform law that has yet to be fully accomplished by the relevant segments of the country’s deregulated power market.

ERC Chairperson Monalisa C. Dimalanta indicated that the partnership of the two agencies had been anchored on “co-creating responsive policies aimed at boosting the competitiveness and growth of the electric power industry, as well as promoting democratic processes in energy regulation.”

In particular, the SEC has outlined “the guidelines for filing of registration statements of generation companies and distribution utilities,” that are required to pursue stock offering, based on the prescriptions of the EPIRA as well as ERC Resolution No. 09 series of 2011; and subsequently amended by ERC Resolution No. 04 that was issued in 2019.

“PowerGen (power generation) and  DU  companies  shall be  allowed  to register their shares of stocks in compliance with the minimum public ownership as set by the ERC in  compliance  with  the  relevant  provisions  of the  SRC  (Securities Regulation Code) and  its implementing rules and regulations,” the SEC has stipulated.

It has reiterated that “a registrant corporation shall engage an underwriter in the public distribution or offering of the registered shares.”

The SEC qualified that “in case  the  registrant  is  able  to  demonstrate  that  it  has  the  ability  to  sell  all or substantially all of its securities to the public, it shall submit not later than five (5) days before the actual filing of the registration statement, a justification letter providing details on how the shares will be sold or offer subject to the Commission consideration if it may allow the non-engagement of an underwriter.”

Upon filing of application of the registrant, the SEC is warranted 45-day period to “review and declare the registration statement effective or reject the same” within that specified timeframe.

“The 45-day period shall reckon on the date of payment of the assessed registration fee,” the SEC emphasized. 

 

 

Related Tags

distribution utilities power generation companies Stock offering Energy Regulatory Commission (ERC) Securities and Exchange Commission
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