Tarlac Electric Inc. seeking to raise P603.75M from primary offering

Tarlac Electric Inc. is seeking to raise as much as P603.75 million through a primary offering, as part of its franchise requirement to offer 30% of its capital stock to the public before the fifth year of its operations.

According to its prospectus filed before the Securities and Exchange Commission (SEC), TEI is seeking approval to offer 1.75 million common shares at P345 apiece, with proceeds to be used for expansion projects, maturing short-term obligations, and general working capital. The company has yet to provide a timeline for the offer.

TEI has tapped Penta Capital & Investment Corp. as the sole underwrite, selling, and receiving agent; and IGC Securities Inc. as financial advisor for the issuance.

Each application must be for a minimum of 400 shares and a maximum of 50,000 shares for individuals; and a minimum of 5,000 shares and a maximum of 400,000 for corporations, associations, and partnerships.

The company expects to net P558.468 million, after deducting P45.281 million for underwriting, legal, advisory, and other expenses related to the issuance. Of the net proceeds, some P175 million will be booked as capital stock while the remainder will be booked as additional paid-in capital.

TEI has four projects in the pipeline for 2021 and 2022 — the construction of a three-storey headquarters (P150.973 million); construction of various network projects (P90.562 million); acquisition and installation of network equipment (P90.562 million); and IT and communications projects (P90.562 million).

TEI, formerly known as Tarlac Enterprises Inc., first received its franchise to operate as a private electric distribution utility serving the electric power requirements of then-Tarlac Municipality (now Tarlac City) in 1949.

The company's franchise was renewed for another 25 years in 2016, but conditions indicated that the company offer at least 30% of its outstanding capital stock to Filipino citizens on or before its fifth year of operations.

As of 2019, the company services some 82,632 customers from six different customer classes — residential, small commercial, secondary, primary, 69 kV, and streetlights. Its energy sales for 2019 was recorded at 438,802-megawatt hours.—AOL, GMA News