Meralco seeks P75-B loan for JV with AboitizPower

PANGILINAN-LED Manila Electric Co. (Meralco) said it will borrow P75 billion from three major local lenders to finance its planned joint venture (JV) with Aboitiz Power Corp. (AboitizPower).

Meralco hopes to secure P75 billion in loans, payable over 12 years, from BDO Unibank, Inc., Bank of the Philippine Islands, and Metropolitan Bank & Trust Co. within the week, the power distributor said in a stock exchange disclosure on Monday.

“The loan will be used to finance investments and other general corporate purposes of the company,” Meralco said.

Meralco Chief Finance Officer Betty C. Siy-Yap said via Viber that the credit facility is intended for the “acquisition of investments in Project Chromite” and will be drawn “within the week.”

In March last year, Meralco and AboitizPower announced that their subsidiaries had entered into an investment agreement to form Chromite Gas Holdings, Inc.

Chromite Gas will be 60% and 40% beneficially owned by Meralco PowerGen Corp. (MGen) and Therma Natgas Power, Inc. (Therma), respectively.

The joint venture is part of the $3.3-billion landmark deal between MGen, Therma, and San Miguel Global Power Holdings Corp. (SMGP) to launch an integrated liquefied natural gas (LNG) facility in Batangas.

Under the deal, MGen and Therma will jointly invest in two of SMGP’s gas-fired power plants: the 1,278-megawatt (MW) Ilijan power plant and the new 1,320-MW combined cycle power facility.

MGen and Therma, through Chromite Gas, along with SMGP, will also invest in the LNG import and regasification terminal owned by Linseed Field Corp. in Batangas.

Late last year, the Philippine Competition Commission (PCC) approved the mega deal, allowing the parties to proceed with their joint acquisition of power facilities and the LNG terminal, subject to certain conditions.

Monalisa C. Dimalanta, chairperson and chief executive officer of the Energy Regulatory Commission, earlier said that the commission needs to review the LNG deal to ensure that the companies comply with market share limitations and to review power supply deals.

Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

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