National Grid Corp. of the Philippines on Wednesday assured it will comply with the ruling of the Energy Regulatory Commission to conduct a $1-billion initial public offering in six months.
“In accordance with the ruling handed down by the ERC, we will comply, and we will be giving them updates, and we are mindful of the six-month deadline,” NGCP spokesman Cynthia Perez-Alabanza said in a virtual briefing with reporters.
Alabanza said NGCP was preparing for the IPO was early as 2010 in compliance with the dispersal of ownership requirement under Section 8 of Republic Act No. 9511, which grants the company the franchise to operate the country’s transmission network.
The ERC, in a decision promulgated on May 14 but dated March 10, denied the appeal of NGCP to seek more time to conduct the IPO given the COVID-19 pandemic, unfavorable market conditions and an ongoing arbitration case with the government.
“The commission, taking into consideration the weight of the testimony of the expert witness in the field of initial public offering process, hereby requires NGCP to complete within the period of six months from the date of receipt of this order its IPO requirement and ultimately make a public offering of its shares in compliance with Section 8 of R.A. No. 9511. NGCP is likewise directed to submit a monthly progress report on its public listing activities on or before the 5th day of every month for the six-month extension of compliance,” it said.
NGCP said it engaged several financial advisors for the IPO, shortlisted “joint global coordinators,” reviewed proposals of underwriters and was finalizing the engagement of legal counsels.
NGCP informed ERC that as part of the initial process of the listing requirements, it engaged Standard Chartered Bank, Philippine Branch and BDO Capital and Investment Corp. to act as its international and domestic financial advisors.Alena Mae S. Flores
BDO Capital president Eduardo Francisco, who served as expert witness during the hearings, reported to the ERC that the NGCP IPO would be unprecedented in terms of scale.
Francisco said there should be a careful preparation to ensure a successful IPO.
He said the Philippine market would not be able to absorb the magnitude of the shares to be listed, hence, they plan to advertise the listing to foreign investors abroad to encourage them to participate in the IPO.
Francisco said he was expecting the value of the total shares to be listed to be about $1 billion. NGCP’s outstanding capital stock is around two billion.
Under its franchise, NGCP is mandated to list in the Philippine Stock Exchange at least 20 percent of its outstanding shares of stocks.