ALSONS CONSOLIDATED Resources, Inc. (ACR) looks to raise P2.5 billion from the issuance of commercial papers in the next three years, with the first tranche to be used for the construction of its Siguil hydropower plant.
The listed firm filed its application for registration of the commercial papers with the Securities and Exchange Commission last Aug. 3. The first tranche of the issuance will consist of P1.5 billion worth of commercial papers with a tenor of 90 days for Series A, 180 days for Series B, and 360 days for Series C.
The commercial papers will be priced at a discount or at face value, with the discounts ranging from 4.9416% to 5.9416% for Series A, 5.1763% to 6.1763% for Series B, and 5.7161% to 6.7161% for Series C.
The Alcantara-led company has engaged Multinational Investment Bancorporation as sole issue manager, lead arranger, and underwriter.
The commercial papers will be listed at the Philippine Dealing & Exchange Corp.
Proceeds of the offer is estimated to reach around P1.395 billion. ACR said it will use these funds to settle its short-term obligations worth P291.25 million, which are set to mature in the third quarter of 2018.
The balance, worth P1.10 billion, will be for the P3.9-billion run-of-river hydroelectric power plant that the company plans to build along Siguil River in Sarangani province.
“The company plans to use the remaining balance of the proceeds to partially bridge finance the Siguil project’s construction until permanent capital is secured,” it said.
ACR targets to start construction of the 15.1-megawatt power plant by the third quarter of this year, with commercial operations scheduled to commence in 2021.
The company, however, noted it has yet to finalize the disbursement schedule of the funds. With this, it intends to invest the proceeds in short-term marketable securities until the disbursement schedule is finalized.
Local debt watcher Philippine Rating Services Corp. earlier gave the company a PRS A plus rating, indicating that ACR has an above average capacity to meet its financial commitment compared to other local firms, yet it is also more susceptible to adverse changes in circumstances and economic conditions than higher-rated companies.
The rating was also assigned a stable outlook, indicating that it is unlikely to change in the next 12 months.
Incorporated in 1974, ACR is involved mainly in energy, power, and property development. It has three operating power generation subsidiaries, namely Western Mindanao Power Corp., Southern Philippines Power Corp., and Mapalad Power Corp.
ACR grew its net income by 26% to P103.14 million in the first quarter of 2018. Revenues picked up 1.8% to P1.68 billion, due to lower financial charges after it settled some short-term debt and pre-paid a portion of long-term debt. — Arra B. Francia