Synergy Grid & Development Phils. Inc. (SGP), the holding company of the National Grid Corporation of the Philippines (NGCP), will be boosting the grid firm’s capital expenditure program through a Php 12.24-billion share subscription.
SGP said it would be subscribing to 206.6 million non-voting preferred shares of NGCP at Php60.10 apiece from the proceeds of its follow-on-offering (FOO) in November 2021.
“This amount will be a huge boost to fund NGCP’s capital expenditure, a huge chunk of which is on new transmission projects for the improvement, upgrading, and expansion of the country’s power grid,” SGP Chairman Henry Sy, Jr. said in a statement.
The investment is expected to support the annual growth demand for power with a growth rate of 6.23% from 2021 to 2025, 6.73% from 2026 to 2030, and 6.49% from 2031 to 2040, according to the 2021 consultation draft of NGCP’s Transmission Development Plan.
The subscription will also increase in NGCP’s capitalization and will give SGP a direct stake in the company of 9.2% of the holding firm’s outstanding capital. SGP will also be entitled to the features of the non-voting preferred shares, like the receipt of dividends apart from the dividends it indirectly receives from NGCP through the holding companies.
“Our investors who chose to partner with us at SGP are instrumental in ensuring that NGCP’s projects in the pipeline will come into fruition and play a significant part in the country’s economic development,” said SGP Vice Chairman Robert Coyiuto, Jr.
SGP indirectly controls 60% of NGCP’s outstanding capital stock with an effective equity interest of 40.2% consisting of common shares.
NGCP went public by way of SGP’s FOO in compliance with Republic Act 9511 or the grid firm’s franchise law.