NGCP’s mode of ownership dispersal secures ERC nod

BY LENIE LECTURA – JUNE 27, 2022
from Business Mirror

The Energy Regulatory Commission (ERC) has cleared the mode of ownership dispersal pursued by the National Grid Corporation of the Philippines (NGCP) last year.

In an order promulgated last June 21, the ERC said NGCP has complied with the dispersal of ownership requirement provided under Section 8 of the Republic Act (RA) 9511 based on Synergy Grid & Development Philippines Inc.’s (SGP) indirect ownership of 40.2 percent of the outstanding capital stock of NGCP.

“The motion raised by NGCP is hereby granted and it is hereby compliant with Section 8 of RA 9511,” the ERC ruled, adding that it did not limit NGCP’s manner of compliance with the listing requirement.

Under NGCP’s franchise, NGCP can undertake public listing or in substitution, submit proof of the listing of any company that owns or controls at least 30 percent of NGCP’s outstanding capital stock. This can be done through the share swap transaction and follow-on offering of 20 percent of SGP’s shares.

“NGCP resorted to the second mode of compliance provided under Section 8 of RA No. 9511,” said the ERC, referring to “the listing in the PSE [Philippine Stock Exchange] of any company which directly or indirectly owns or control at least 30 percent of the outstanding shares of stock of NGCP.”

This mode of ownership dispersal required NGCP to establish that SGP is listed in the PSE, that SGP should indirectly or directly own or control NGCP shares, and that the ownership of NGCP shares by SGP should at least represent 30 percent of the outstanding shares of NGCP.  The ERC ruled that NGCP complied.

“Therefore, when SGP acquired 67 percent of the total outstanding shares of stock of OneTaipan and Pacifica21, respectively, indirect ownership of 40.2 percent of the outstanding shares of stock of NGCP was acquired by SGP.  Considering that SGP is a company listed in the PSE, NGCP is compliant with Section 8 of RA 9511,” the ERC said.

The NGCP was granted a concession to operate the National Transmission Corp.’s (TransCo) transmission system and the grid in February 2008. The same was entered into by TransCo and Power Sector Assets and Liabilities Management Corp. Thereafter, NGCP commenced business operations in January 2009 in accordance with its franchise law or RA 9511.

Under its franchise, NGCP is required to make a public offering of its shares representing at least 20 percent of its outstanding capital stock to the public or listing in the PSE of any company which directly or indirectly owns or controls at least 30 percent of the outstanding shares of stock of NGCP.