SMC unit turns to Singapore bond market for funds

San Miguel’s power generation platform is tapping the Singapore bond market to raise up to $300 million to bankroll projects that include a planned liquefied natural gas (LNG) terminal in Batangas province, which is slated to be up and running by June 2022.

If this is achieved, SMC Global Power Holdings Corp. will beat by a few months a similar LNG project that First Gen Corp. and Tokyo Gas Co. Ltd. expect to go online as early as the third quarter of the same year.

For the issuance of undated senior perpetual capital securities, SMC Global Power has engaged Credit Suisse (Hong Kong), DBS Bank, Merrill Lynch Singapore, HSBC, Mizuho Securities Asia, Standard Chartered Bank, Deutsche Bank Singpaore and UBS Singapore as joint lead managers.

“The net proceeds … will be used for capital expenditures, investments in [LNG] facilities and related assets and for general corporate purposes,” the San Miguel subsidiary said.

Last August, SMC Global Power said it was in advanced stages of executing a binding agreement with global engineering firm AG&P to provide receiving, storage and regasi­fication services for the current needs of the Ilijan power plant as well as when it has been expanded.

The San Miguel group is running and operating the 1,200-megawatt gas-fired facility under contract with the state-run Power Sector Assets and Liabilities Management Corp., and they want the LNG terminal commercially operational by the time the contract lapses in June 2022.

San Miguel believes that LNG projects—including a terminal and additional power plants—will strengthen its portfolio that will put it in a better position to secure off-take contracts.

In particular, LNG will bring to SMC’s power generation portfolio the benefits of high efficiency and low carbon emissions.

Besides the Ilijan power plant complex, SMC Global Power also has the 1,000-MW Sual coal-fired power plant and the 345-MW San Roque hydropower plant, which are both in Pangasinan province.