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Meralco secures P2.5-B, 7-year loan from PNB


Manila Electric Co., the country's largest power distributor, on Tuesday said it signed a P2.5 billion seven-year loan with the Philippine National Bank, which it will use for general corporate purposes. Meralco made this disclosure to the Philippine Stock Exchange a day after signing a separate P5-billion note facility agreement with First Metro Investment Corp., chiefly to refinance some maturing loans. "(The loan will be used for) general corporate purposes which include operating expenses and capital expenses," Rafael Andrada, Meralco first vice president and treasurer said, adding that the loan was not going to fund the power distributor’s ongoing foray into power generation. On Monday, Meralco said in its SEC disclosure “the proceeds of the fixed-rate notes due 2015 and 2016 will be used to refinance existing debt obligations and to fund corporate requirements." It said the notes will be issued on Dec. 21, 2010. In mid-November, Meralco signed a P4.8-billion fixed-rate note facility to finance its plans to venture into power generation and to pay off its debts. That facility was arranged by BPI Capital Corp. as issue manager and bookrunner, Meralco said. The seven- and 10-year notes, which were priced at 5.8327 percent and 6.4538 percent, respectively, were issued on Dec. 2. P7B-P8B in reliability projects Meralco spends about P7 billion-P8 billion annually in what are known as electric capital projects to improve the reliability and capability of its system. The company is set to complete 12 more such projects before the end of the year, which will add a total 249 megavolt amperes to its distribution substation capacity. It is also expecting to be further reduce technical system loss by 6,009,301 kilowatt-hours (kWh) per year after completion of these 12 projects. This translates to around P37.3-million reduction in system loss that the company charges its customers. “These projects include three new distribution substations, one sub-transmission line upgrading, one sub-transmission line reconfiguration and the upgrading of seven distribution lines," Meralco executive vice president and networks head Ricardo Buencamino said on Nov. 15. Meralco has over 4.5 million customers in its franchise area, and is now controlled by PLDT, San Miguel Corp., First Philippine Holdings Corp. and other minority shareholders. — DM/VS, GMANews.TV

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