NGCP commits to public share offer

MANILA, Philippines — The National Grid Corp. of the Philippines (NGCP) remains committed to undertake its long-delayed initial public offering (IPO).

In its position paper submitted to the Senate Committee on Energy, NGCP said it has not asked for an exemption but sought reasonable extension of the period to conduct its maiden offering on the Philippine Stock Exchange (PSE).

“Consistent with the performance of its obligations under its franchise and the concession agreement, NGCP intends to comply with the requirement of listing of shares,” NGCP said as read by spokesperson Cynthia Alabanza in a Senate hearing yesterday.

Under Republic Act 9511 or NGCP’s charter, the grid operator was given a period of 10 years from Jan. 15, 2009 to comply with its statutory requirement to offer at least 20 percent of its outstanding capital stock to the public.

The same law also allows the ERC to grant requests for extensions, subject to certain conditions.

One of the reasons cited by NGCP for delaying its IPO is the absence of the final determination of price control arrangements for the fourth regulatory period.

NGCP said the final determination sets the amount of revenues it will be allowed to recover from its consumers, the amount of capital expenditures it can spend for its projects, and how much operation expenses it can incur.

“Due to uncertainty in NGCP’s expected future earnings as well as the lack of an approved capital expenditure budget for the fourth regulatory period, NGCP can not meet the basic components for an IPO and provide the optimum price for its shares,” she said.

“Investor confidence in NGCP’s maiden entry into the capital market has to be established by ensuring sound and reliable and definitive financial information to the investing public,” she said.

During the same hearing, ERC legal service director Gregorio Ofalsa said the agency has committed to finish the regulatory reset for NGCP by December 2020.

Sen. Sherwin Gatchalian—who chairs the Senate Committee on Energy—has directed the ERC to stick to its commitments on the final determination of NGCP’s fourth regulatory period.

Because of the delayed regulatory reset, the lawmaker said NGCP has already overcharged P46.55 billion to consumers.

NGCP also cited the pending disputes among NGCP, the National Transmission Corp. and the Power Sector Assets and Liabilities Management Corp. (PSALM), which are now in arbitration, as well as the threats from TransCo on its concession agreement.