IFC may extend loan to winning PNOC-EDC bidder

The International Finance Corp. (IFC) may consider a financial assistance package to the winning bidder for the 60-percent stake of Philippine National Oil Co. (PNOC) in its subsidiary, PNOC-Energy Development Corp. (PNOC-EDC), the country’s largest geothermal power producer.

Industry sources said IFC, the private sector investment arm of the World Bank Group, has included this facility in its list of possible investment in the near future.

“There is a possibility that they would be providing such facility to the winning bidder of PNOC-EDC’s shares,” a source said.

Since IFC is no longer interested in increasing its shareholdings in PNOC-EDC, the multilateral lending institution will provide assistance by giving out loans, the sources pointed out.

 “I think, at this point we’re still happy with what we have in PNOC-EDC,” said IFC principal investment officer Jesse Ang, in an earlier interview.

IFC currently has a five-percent stake in PNOC-EDC. The multilateral financial institution serves as one of the cornerstone investors of PNOC’s geothermal arm when it went public late last year.

 IFC  currently has been extending similar financing windows to winning bidders of the National Power Corp.’s power plants.

It recently loaned out $105 million to the Aboitiz group to partly finance the power generation company’s acquisition of the  Magat hydropower facility in Isabela.

PNOC president Antonio Cailao, for his part, said PNOC-EDC’s financial advisors ING Bank and the Development Bank of the Philippines (DBP) are also preparing financial schemes for the winning bidder.

Cailao said DBP and ING recently held a briefing to present the terms of a proposed staple financing facility that will be made available to the bidding groups.

Arranging staple financing in acquisition transactions, he said, has become a common international practice given its benefits.

 “Because financing for an acquisition is already in place, it allows the seller to launch an expedited bidding process and receive more timely bids. Buyers also benefit because they take comfort that the requisite financial backing is already in place,” he said.

 Among the interested bidders for the PNOC-EDC shares are: Aboitiz Power Corp., Ashmore Group, Alsons Consolidated Resources, Avenue Capital Group, Filinvest Development Corp., First Gen Corp., Geyser Green Energy, International Power, One Energy Ltd. Reykjavik Energy, San Miguel Energy Corp., Marubeni Corp. and Sumitomo Corp.