Corporate News


SMC to list power unit in Q3




Posted on April 05, 2017


SAN MIGUEL Corp. (SMC) will list its power development arm SMC Global Power Holdings Corp. in the third quarter of 2017 at “whatever price or whatever outlook,” its president said.

Ramon S. Ang -- VICTOR V. SAULON
Ramon S. Ang, SMC president and chief operating officer, said the diversified conglomerate was preparing for its subsidiary’s initial public offering (IPO) within the third quarter.

“Third quarter, listing na,” he told reporters.

Asked about the size of the offering, he said: “Hindi ko pa matiyak (I am not yet certain).”

He cited the current state of the country’s power industry as one of the factors contributing to uncertainty.

Ang power business hindi kamukha noon na very bullish. Ngayon, biglang ang presyo bagsakan. Kaya hindi masyadong maganda (The power business is no longer how it was before, which was very bullish. Now, prices have suddenly fallen. That’s why it’s not so good),” he said.

Kung mababa ko ibenta per share, di swerte ng nakabili because after a year or two sisipa ng doble ’yon (If I sell each share at a lower price, then the buyers will be lucky because after a year, prices will double),” he said.

Mr. Ang’s confidence in SMC Global Power planned IPO is rooted in the parent firm’s sound finances, which allows the unit to remain liquid even when it builds a plant without contracting buyers for its output.

Ang San Miguel merchant plants ang mga tinayo. Kahit walang offtaker, kahit masama ang presyo wala kaming problema kasi meron naman kaming pambayad kung sakali (San Miguel has built merchant plants. Even without an offtaker, even if prices are bad, there would be no problem because we can pay, if ever),” he said.

Merchant plants sell their output at the wholesale electricity spot market at prices that are generally lower than those set through power supply agreements or bilateral contracts.

“There is no problem for San Miguel group to put up anything na kahit ’di kaagad kumita kasi may pagkukunan na iba. Kukunin natin sa beer, or sa Pure Foods or sa packaging o kung saan (There is no problem for the San Miguel group to put up anything, even if it will not earn immediately because it has other sources. We will get it from beer, or from [food subsidiary San Miguel] Pure Foods [Co.], or from packaging or wherever),” he said.

Among SMC Global Power’s latest project is the four-unit 600-megawatt (MW) coal-fired power plant in Limay, Bataan. The first 150-MW unit of the plant started its commercial operation earlier this year, running at full capacity and fired by diesel when the Malampaya offshore natural gas platform west of Palawan went on maintenance shutdown from Jan. 28 to Feb. 16.

The second 150-MW unit is expected to start operating towards the end of the year, Mr. Ang said.

SMC Global Power also has a new station in Malita, Davao del Sur -- a four-unit coal-fired power plant, each with a capacity of 150 MW. The first two units are built, but plans for the last two units have yet to be finalized.

Alan T. Ortiz, SMC Global Power’s president, earlier said the company’s installed capacity would reach around 3,500 MW by this year.

Mr. Ang nixed any plan to venture into a liquefied natural gas (LNG) project, which Mr. Ortiz earlier dismissed, saying the unit has no plan in the pipeline for any project using the technology or resource.

“In a competitive market today paano mo ibebenta ’yon [how will you sell it] at P2.50-P3.00 [per kilowatt],” he said. “Nothing will survive that kind of rate.” -- Victor V. Saulon