San Miguel Corp has delayed its plans to list its energy unit SMC Global Power Holdings Corp on the Philippine Stock Exchange due to unresolved contractual issues with the Power Sector Assets and Liabilities Management Corp (PSALM).
“With what is happening now, how can we proceed with IPO because of issues in the Ilijan and Sual plants?” SMC President and Chief Operating Officer Raymond Ang said. The firm was eyeing to list on the stock exchange in the third quarter of this year.
PSALM as the manager of assets and liabilities of National Power Corp, is a government-owned and controlled entity in the Philippines. The dispute arises from the Independent Power Producer Administration Agreements (IPPAs) between San Miguel and PSALM relating to unpaid fees for the two plants.
PSALM terminated San Miguel’s IPPA deal on alleged unpaid payments in relation to the 1,200 MW Ilijan combined cycle power plant in Batangas province that it recently reported to have bloated to P12 billion.
San Miguel corporate information officer Ferdinand Constantino explained that in order to address the issues, the subsidiaries of SMC Global Power were left with no other recourse but to initiate the appropriate court proceedings and actions with the Department of Justice (DOJ) against PSALM and its key executive officers.
“Contrary to the press statements made by PSALM, the amounts due to PSALM under the IPPAs have been paid in full by SMC Global Power and its subsidiaries, as advised by Mr. Ramon S. Ang,” Constantino said. “The extent of such payments have been presented to the courts and the DoJ.”
On the other hand, this is the third time the power firm has deferred its IPO plan. First was a US$700 million IPO plan in 2013 postponed to 2014, then slated anew last year but was cancelled due to volatility in the stock market.
With this most recent planned IPO, San Miguel initially sought to raise P12 billion (about US$235 million) to over P27 billion (about US$527.8 million) from the maiden offer to 290 million to 385 million shares priced at P44 to P71 apiece.
SMC Global is one of the largest local power firms. Aside from the Ilijan and Sual power plants, the company also owns the 345 MW San Roque Hydroelectric Multipurpose Power Plant in Pangasinan, the Greenfield Power Plants in Davao City, and Bataan province that are designed to produce up to 900 MW of electricity via modern combustion technologies.