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PHILIPPINE National Oil Co.-Energy Development Corp. (EDC) said it
has hedged the bulk of an outstanding yen-denominated obligation.
In a disclosure to the Philippine Stock
Exchange, the country’s largest geothermal energy producer said
that it has hedged 67 percent or 8 billion yen (approximately P3.237
billion) of its 12-billion- yen Miyazawa loan.
Erudito S. Recio, EDC investor relations
manager, said the hedge forms part of the company’s “ongoing
currency risk management program and was undertaken in two tranches”
with an unnamed AA- rated international commercial bank as the
counterparty.
The Miyazawa loan is due for bullet payment on
June 1, 2009 and is equivalent to 23 percent of EDC’s P21.4
billion total yen-denominated liabilities and represents 16 percent
of the company’s total long-term foreign loans.
The company originally targeted to complete the
hedging in the third quarter of last year to partially mitigate the
impact of a yen appreciation.
EDC has P30.5 billion in long-term foreign
loans, of which 70 percent are yen-denominated.
The former state-run firm was sold to First Gen
Corp. of the Lopez group, which bought the government’s remaining
60-percent stake in EDC through wholly-owned unit Red Vulcan
Holdings Corp. for P58.5 billion last year.
EDC earlier said that it has earmarked the bulk
of its capital expenses for its drilling operations, which it
expects to become a growth driver this year.
The company has seven on-shore drilling rigs,
and expects the equipment acquisition and upgrade program to boost
its drilling portfolio abroad.
Last year, it signed its fifth drilling contract
with Lihir Gold Ltd. of Papua New Guinea worth P686.9 million.
As of December 31, 2007, EDC had completed 82
percent of the contracted days earning P624.8 million in revenues,
139 percent higher than the previous year’s P261.4 million.
Its shares closed higher Tuesday at P5.1 from P5
previously.
-- Euan Paulo C. Añonuevo
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