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Power distributor eyes P604-M public offering

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POWER DISTRIBUTOR Tarlac Electric, Inc. (TEI) aims to raise P603.75 million in a public offering, in order to comply with requirements under its legislative franchise.

In a prospectus filed with the Securities and Exchange Commission (SEC) on Tuesday, TEI said it wants to register four million issued and outstanding common shares, from which it will offer 1.75 million shares at P345 each.

A copy of the prospectus was sent by the SEC to reporters on Thursday.

The company expects to generate net proceeds of P558.47 million from the offering, which will be used to support its expansion plans, refinance maturing loans, and fund general working capital.

The public offering is in line with the company’s franchise, legislated through Republic Act (RA) No. 10795, which requires it to offer to the public 30% of its outstanding capital stock before the fifth year of its operations.

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This provision is in accordance with RA No. 9136, or the Electric Power Industry Reform Act, which requires that generation companies and distribution utilities sell at least 15% of their common shares of stock to the public if they are not publicly listed. Newly formed companies must make this offering within the first five years of the issuance of their certificate of compliance.

TEI’s shares will not be listed on the Philippine Stock Exchange.

The company tapped Penta Capital & Investment Corp. as its sole underwriter for the offering.

TEI is a private electric distribution firm that serves residential, commercial and industrial consumers. It had 82,632 customers as of end-2019.

Among its plans for expansion are building a three-story headquarters, constructing network projects, acquiring and installing network equipment, and investing in information technology and communications projects. Disbursements of offer proceeds for these projects are scheduled in 2021. — Denise A. Valdez

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