Manila Electric sells notes, to invest in Aboitiz firm
MANILA, June 27
MANILA, June 27 (Reuters) - Manila Electric Co (Meralco) said on Monday it had raised 5 billion pesos ($115 million) from a sale of fixed-rate notes and would also invest in a company that plans to build a 600-megawatt, coal-fired power plant on Luzon island.
Meralco, the country's largest power distributor, sold 7-year and 10-year notes to a group of primary institutional lenders. It exercised an oversubscription option of 2 billion pesos after drawing bids of more than 7 billion pesos.
The yields were fixed at 6.2692 percent for 7-year notes and 6.8900 percent for 10-year notes, a spread of 20 and 21.12 basis points over the benchmark rates, respectively, Meralco said.
The sale was managed by the HSBC Ltd , with funds to be used for capital expenditures and general corporate purposes.
Separately, Meralco said its board approved on Monday an investment in unlisted Redondo Peninsula Energy Inc (RP Energy), through its wholly owned Meralco PowerGen Corp unit.
RP Energy is a joint venture of unit of Therma Power, a unit of Aboitiz Power Corp , and Taiwan Cogeneration Corp . Aboitiz Power said the Meralco unit was expected to take a controlling stake in RP Energy.
RP Energy has the rights to put up a coal-fired power plant with a 600 MW capacity in the Subic Bay Freeport Zone in Zambales province, north of Manila. Commercial operation of the plant is expected to start in 2014.
Meralco, controlled by the group of holding firm Metro Pacific Investments Corp and PLDT and partly owned by food-to-power conglomerate San Miguel Corp , did not disclose the size of the investment.
Meralco is looking to build power plants with a total capacity of 1,500 megawatts to fill an expected increase in power demand in coming years. The new power plants are estimated to cost $2.3 billion and are expected to be operational within the next five to six years.
Shares in Meralco rose 1.6 percent ahead of the announcements in a market that was largely flat.
($1 = 43.6 pesos) (Reporting by Erik dela Cruz; Editing by John Mair)