EDC plans P11.5-billion borrowings

MANILA, Philippines — Lopez-led Energy Development Corp. is looking to borrow P11.5 billion from various banks within the quarter to support  its financial requirements for the year.

In a disclosure to the Philippine Stock Exchange (PSE) yesterday, EDC said it secured a board approval to obtain three-year bilateral loan facilities with several local banks amounting to up to P11.5 billion.

The company is currently in talks with three to four banks and expects to close a deal within the quarter, EDC vice president for corporate finance Erwin Avante said in a text message yesterday.

EDC said the loan would be used to “refinance its $80-million club loan, fund a portion of its capital expenditure (capex) program, and for other general corporate purposes.”

Avante said the $80-million club loan was secured from two foreign banks and was settled last June.

Meanwhile, the company is spending P6.1 billion this year to boost the reliability, efficiency and resiliency of its power assets especially those hit by natural calamities.

Of the total capex, the biggest component is allocated for  drilling works of three wells in its geothermal asset in Leyte.

Another major item in EDC’s spending program is to invest heavily in resiliency projects by increasing seismic specifications and landslide mitigation of its assets.

The small items in its capex program are dedicated to upgrading cooling systems, replacement of pumps of geothermal power plants to improve reliability.

These projects are expected to result in flat earnings and revenues for the year despite the negative impact of the natural calamities that hit EDC’s power projects last year.

Last year, EDC posted recurring net earnings of P8.8 billion, four percent lower than the previous year’s P9.2 billion.

Consolidated revenues slipped by three percent to  P33.3 billion.

In the first quarter, EDC reported a 56 percent drop  in consolidated net income  to P.1.34 billion as revenues decreased by 15 percent to P8.18 billion.