SMC Global Power Holdings Corp., the power arm of San Miguel Corp., said Thursday its board approved the issuance of $300 million in undated senior perpetual capital securities to finance the company’s projects including its foray into liquefied natural gas.
“The net proceeds of the 2020 securities will be used by the corporation for capital expenditures and investments in liquefied natural gas facilities and related assets and for general corporate purposes,” SMC Global Power said.
The board also approved the appointment of Credit Suisse (Hong Kong) Ltd., DBS Bank Ltd., Merrill Lynch (Singapore) Pte. Ltd., The Hongkong and Shanghai Banking Corp. Ltd., Mizuho Securities Asia Ltd., Standard Chartered Bank and UBS AG Singapore Bank as joint lead managers.
DB Trustees (Hong Kong) Ltd. was appointed as trustee and Deutsche Bank AG, Hong Kong Branch as paying agent for the offer, issuance and listing of the securities.
“The 2020 securities will be constituted as a trust deed by and between the corporation and DB Trustees (Hong Kong) Ltd as the trustee and will be listed on the Singapore Exchange Securities Trading Ltd.,” the company said.
SMC Global Power said in August it was in talks with AG&P for the construction of a liquefied natural gas (LNG) terminal alongside its 1,200-megawatt Ilijan power plant in Batangas.
“As of August 2020, the company is in advanced stages of executing a binding term sheet on the terminal use agreement with AG&P to provide LNG receiving, storage and regasification services to the Ilijan power plant and the Ilijan expansion,” SMC Global said.
The company negotiated “priority status” for the Ilijan LNG terminal over all projects of AG&P and as the foundation customers, SMC’s power plants will also be the priority terminal users for the terminal and its capacity.
Supply of natural gas to the Ilijan power plant is set to expire by June 2022 to coincide with the end of its independent power producer agreement with the government.
Upon expiration of the Ilijan IPPA with the government, SMC Global subsidiary South Premiere Power Corp. will become the legal owner and operator of the Ilijan power plant.
The LNG terminal is expected to be commercially operational by June 2022, in time for the expiration of the Ilijan IPPA.