Listed A Brown Co. (ABC) reported on Tuesday to the Philippine Stock Exchange that its subsidiary, Monte Oro Grid Resources Corp. (MOGRC), has secured a P2-billion term loan from Banco de Oro Unibank Inc.

In a disclosure, ABC said the amount will be used to fund its 30-percent stake in the National Grid Corp. of the Philippines (NGCP), which won the concession and franchise to operate the assets and business of the National Transmission Corp. (Transco).

MOGRC is 100 percent by Monte Oro Resources and Energy Inc. (More) of which ABC owns 15-percent interest.

MOGRC, together with Calaca High Power Corp. and the State Grid International Development Ltd.—a subsidiary of State Grid Corp. of China—make up NGCP.

On January 15, the Power Sector Assets and Liabilities Management Corp. (Psalm) formally turned over the 25-year concession of Transco to NGCP and started operations of the country’s sole transmission system.

Of its $3.95-billion price offer, NGCP has already remitted $987.5 million to Psalm as upfront payment for the transmission system and in compliance with the provisions of the sale transaction.

NGCP acquired the 25-year concession to operate and maintain Transco in a public bidding conducted by Psalm in December 2007.

National Grid officials earlier expressed confidence that it may not need to tap the credit market to finance the acquisition. However, Walter Brown, NGCP president and chief executive, said the company took into consideration Transco’s sound revenue stream.

“We have a credit line through the 20-year deferred payment scheme allowed by the government for the remaining 75 percent of the actual purchase prices,” Brown told reporters. He said payment for the balance could be funded from internally generated funds. Prior to its acquisition, Transco posted a net income of P16.78 billion in 2007.

Brown noted that the company may also resort to short-term bridge financing. Under the Transmission Development Plan and prior to NGCP’s takeover, Brown said there are projects that were programmed and were included in the bid documents.

He noted that the projects programmed before they took over have yet to start, and these are envisioned to bring the system up to a given level of efficiency.