National Grid Corp. of the Philippines (NGCP), operator of the country’s electricity superhighway, is considering doing an initial public offering, instead of backdoor listing.
In a recent interview with the Inquirer, NGCP president Henry Sy Jr. said: “If you’re a good shepherd, you pass through the front gate.” This was in reply to a question on whether he was keen on reviving a share-swap scheme that would have allowed Synergy Grid & Development Philippines Inc. to acquire 60 percent control of the privatized transmission concession.
Sy said that subject to a favorable economic situation, he was keener on an initial public offering rather than backdoor-listing.
Asked about his timetable for the stock market debut, Sy said NGCP would comply with what the government requires.
NGCP is required to become a public company by January 2019. For concessionaires of key infrastructure, going public is seen as way to ensure greater public accountability and good governance.
Earlier, Synergy rescinded a 2011 deed of assignment between the corporation and two holding companies controlled by Sy and businessman Robert Coyiuto Jr. This was in relation to the exchange of Synergy’s shares with Sy’s shares in One Taipan Holdings Inc. and Coyiuto’s shares in Pacific21 Holdings Inc. These two companies each own around 30 percent of NGCP.
The Sy-Coyiuto tandem had said their intention over the said assignments was that they would qualify as a “tax free” transfer and that consequently, no gain or loss be recognized thereon. Because no such “tax free” arrangement has been allowed by the government in the last five years, the two businessmen decided to unwind the transaction.
Sy has been generally happy with the stable earnings of NGCP, which however, has been grappling with some right-of-way issues when maintaining some of the infrastructure, especially in the countryside.
On other potential growth areas for NGCP, the group seeks to encourage the private sector to build more power generation facilities and modernize outdated facilities.
NGCP is unfazed by the increasing use of solar power, a renewable energy source which advocates say could make the grid irrelevant in the future.
For instance, Elon Musk—founder of American solar firm SolarCity and Tesla Motors, the world’s first successful electric car company—believes in a future where every building will be powered by solar energy on its rooftop, replacing the electricity grid we know today.