BSP OKs transfer of $400-M Napocor debt
By Doris Dumlao
Philippine Daily Inquirer
First Posted 20:29:00 09/07/2008
Filed Under: Economy, Business & Finance,Banking
THE BANGKO SENTRAL NG PILIPINAS approved last week the transfer of about $400 million worth of liabilities of state-owned National Power Corp. to Power Sector Assets and Liabilities Management Corp., as part of ongoing structural reforms in the power sector.
The BSP’s policy-making Monetary Board, which is mandated to screen all public sector borrowings, had to give its imprimatur before the transfer could be made because there was a change in the borrowing entity, central bank sources said.
Under the Electric Power Industry Reform Act of 2001, PSALM was given the mandate to manage and privatize Napocor’s assets, which include 35 power plants and nonpower and real estate assets. Napocor president Cyril del Callar said the amount was part of $7 billion in remaining debts that would be transferred to PSALM.
He said the transfer was being done in phases as soon as an agreement with a creditor or a group of creditors had been reached.
The $400 million worth of debts recently approved for transfer included various debts consolidated into one block for central bank approval, BSP sources added.
Before any such transfer could be made or brought to the BSP, the government needs to first get the written consent of the creditors on the transfer of liabilities to PSALM.
The transfer is, in turn, needed to allow PSALM to settle and reduce outstanding debts using some of the privatization proceeds.
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