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NGCP ready to ‘take steps’ towards IPO

By Angelica Y. Yang

NATIONAL Grid Corporation of the Philippines (NGCP) is pressing onward with preparations to hold its initial public offering (IPO), the power grid operator’s spokesperson said, prompting analysts to look into the company’s attractiveness.

“We were previously advised that market conditions may not be ideal at the moment, but we continue to take steps to prepare for an eventual IPO,” NGCP spokesperson Cynthia P. Alabanza told BusinessWorld on Viber.

She added that the privately owned company has always been preparing for its public listing since 2014, while keeping in mind its “compliance to its franchise.”

Asked about the estimated size of the IPO and other details, Ms. Alabanza said that nothing was definite, and that she was not at liberty to disclose more information.

In 2019, Ms. Alabanza told the Senate that the IPO was delayed because of the absence of price control arrangements, pending disputes among state agencies, and the public threats against NGCP’s concession.

The National Transmission Corp. (TransCo) said on Thursday that it welcomed NGCP’s long-overdue public listing.

“We welcome NGCP’s long-overdue IPO, which — if indeed forthcoming — we hope to be in keeping with the spirit of the law, which is to strengthen power consumers’ rights through a fair distribution of NGCP’s ownership to the Filipino People,” Transco President Melvin A. Matibag told BusinessWorld on Viber.

Two years ago, the state-led TransCo asked the Energy Regulatory Commission to deny NGCP’s petition to defer its IPO, saying that the grid operator should not be allowed to benefit from its inaction on the provisions of its franchise.

BusinessWorld has reached out to the Department of Energy for comment on NGCP’s eventual listing, but has not yet received a reply as of press time.

INVESTORS WEIGH NGCP’S APPEAL
AAA Southeast Equities, Inc. Research Head Christopher John Mangun said that the IPO would be attractive to investors as it would come from a “utility company that has been favored by long-term investors and institutions.”

Asked about Synergy Grid & Development Philippines, Inc. (SGP), which was previously seen as the vehicle firm for NGCP’s backdoor listing, Mr. Mangun said it was one option that could be considered, but it would in turn affect dividends.

“The backdoor [listing] through SGP was one option that they were leaning towards from the beginning since the owners are the same and it would consolidate their holdings, however it would significantly impact dividends as the public would have indirect ownership over the company rather than direct through IPO,” Mr. Mangun said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the attractiveness of NGCP’s proposed IPO would depend on various factors. These include its pricing, industry standing, financial performance, overall valuation, and future business or industry prospects, and the public interest or security involved in the industry or business.

Meanwhile, Regina Capital Development Corp. Managing Director Luis A. Limlingan said that investors would most likely find the IPO “attractive if it is reasonably priced, given prevailing market conditions.”

He also said that NGCP has a business model that investors would be interested in.

“Their power transmission operations is also an attractive business model, which investors would have a keen interest in,” he said.

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