PSALM pares down debt to ₧357.7B in May
BY LENIE LECTURA – JUNE 22, 2021
from Business Mirror
Facade of the Agus I Hydroelectric Power Plant in Lanao del Sur owned by the Power Sector Assets and Liabilities Management Corp.
THE Power Sector Assets and Liabilities Management Corp. (PSALM) reduced its debt obligation to P357.75 billion at the end of May.
In a text message, PSALM President Irene Joy Garcia said the state firm’s outstanding financial obligation consists of P255 billion in debts and P102.75 billion in lease obligations.
“Actually, the target set was P358.72 billion by end of 2021, but PSALM will target as much reduction in the financial obligations as possible,” said Garcia.
At end-2020, PSALM’s debt stood at P381.91 billion. It had reduced its debts by P40.103 billion, higher than its target of P10.18 billion for 2020.
PSALM sources funds for debt payment from privatization proceeds, which include payments from Independent Power Producer Administrators and from concession payments from the transmission business.
It had successfully disposed of a total of 10 real estate assets in Agusan in Bukidnon, Maco in Davao de Oro, Nasipit in Agusan del Norte, Loboc in Bohol and Camalaniugan in Cagayan, raising revenues of P51.65 million. PSALM also raised a total of P26.45 million from the sale of other disposable assets from retired equipment and scrap materials.
To generate additional income, PSALM entered into short term lease agreements with government offices over certain assets that are not yet scheduled for privatization, raising additional revenues of P29.50 million.
PSALM sold the 650-megawatt (MW) Malaya Thermal Power Plant (MTPP) via a negotiated bid to Fort Pilar Energy Inc. which submitted the highest offer—P3,123,500,000. It surpassed the minimum offer price of P1,845,222,000 that was set by the PSALM Board of Directors for this negotiated sale process.
The sale of the MTPP is on an “as is, where is” basis. It includes the 300-MW Unit 1 and the 350-MW Unit 2 as well as the underlying land, in Pililla, Rizal.
PSALM said it needs the proceeds of this privatization activity to pay for the remaining stranded contract costs and stranded debts.
“Thankfully, we successfully privatized MTTP. Hopefully, once we finish that process, we will also use the proceeds to pay off more of the financial obligations before the year ends. In addition, we are working on some real property privatizations as well,” said Garcia.
MTPP is currently being dispatched as a Must Run Unit (MRU) by NGCP. However, on the turn-over date, MTPP is no longer required to run as an MRU as approved by the Department of Energy.
