EDC prepays US$185m of loan to Japan International Cooperation Agency
Philippine based Energy Development Corp. (EDC) prepays US$185 million worth of yen-denominated loan to the Japan International Cooperation Agency, to lessen risk of foreign exchange rate exposure.
Philippine listed Energy Development Corporation (EDC) announced today, “it has prepaid recently some 8.1 billion worth of yen-denominated loan (US$185 million) to the Japan International Cooperation Agency.
The Lopez firm disclosed to the Philippine Stock Exchange (PSE) that the settled amount was part of its debts with the Overseas Economic Cooperation Fund (OECF), which was subsequently transferred to its successor-institution JICA.
“To date, only 534.6 million Japanese yen of principal remain outstanding representing 0.64% of the total loans of the company,” EDC added.
Company officials indicated that the OECF loan had been utilized for the company’s past projects and working capital. It has been re-lent to it then by pre-privatization parent firm, Philippine National Oil Company.
The listed firm focused on prepaying Japanese yen borrowings because these have been assessed as inducing greater risk of foreign exchange rate exposure.
Apart from the JICA/OECF loans, the company also worked on settling its ¥22 billion Miyazawa loan last year, enabling it to corner forex and interest payment gains.
EDC president and chief operating officer Richard B. Tantoco has been openly stressing that the company’s scale of exposure on yen-denominated loans was always “a cause of concern” for its investors because it has been turning them vulnerable to “forex translation losses”.
The geothermal firm claimed that the string of advance settlements of its Japanese loans have been part of its “overall plan to overhaul currency mix and mitigate its foreign exchange exposure risks.”
In tandem with the fiscal discipline it has been enforcing to improve bottom line, EDC is similarly all-set on its future investment plans – with the intent of hitting its goal as the top geothermal energy producer in the world.
On geothermal resource development, the company secured service contracts for ventures in Tongonan, Southern Negros, Bacon-Manito, Mt Apo, Northern Negros, Mount Labo and Mainit geothermal projects.”
Source: Manila Bulletin