The Securities and Exchange Commission has simplified the registration process for power generation and distribution utilities firms seeking fresh funds through the public offering of securities.
Under SEC Memorandum Circular No. 4, Series of 2024 on Securing and Expanding Capital for PowerGen Operators and Wholesale Electricity and Retail Services, the mandatory sale of at least 20 percent of a power company’s equity structure has been waived to only 15 percent. The public sale is consistent with the terms set by the Electric Power Industry Reform Act (EPIRA) made the law in 2001.
The simplified procedure is meant to enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors, as provided by the EPIRA Law.
Under the guidelines, the SEC is mandated to complete the registration process within 45 days from filing.
Upon favorable consideration, the SEC issues a pre-effective letter stating the conditions whose compliance generates the order of registration and/or permit to sell securities to the public.
The public offering and sale of the securities may then commence within 10 business days from the date of the effectivity of the registration statement.
This presumes the registrant has secured the necessary clearances from the SEC, the Office of the General Counsel and Office of the General Accountant (OGA).
The registrant corporation may choose not to engage an underwriter for the public distribution or offering of its shares, provided that it has secured approval from the SEC by demonstrating it has the ability to sell all or substantially all of its securities to the public. A power generation company or distribution utility company may also issue securities in tranches, to be offered on a continuous or delayed basis for a period not exceeding three years from the effective date of its initial shelf registration statement.
