(Bloomberg) -- San Miguel Corp.’s power unit isn’t expecting a shortage in funds after regulators declined its request to raise charges to recover losses from higher coal costs, Ramon Ang, president of the Philippines’ largest conglomerate, said.

“Banks will always take away your umbrella when it’s rainy season when you don’t have the money,” Ang said on Friday. “But we have the money to pay.” Refinancing for San Miguel and its units is done, he said, without elaborating.

Ang made the comments after a Bloomberg Intelligence report said San Miguel unit SMC Global Power Corp. risks a funding shortfall of as much as $1 billion by June 2023. 

SMC Global Power, one of the nation’s top two electricity generators, will free up as much as 12 billion pesos ($204 million) as its annual lease with the government for the 1,200-megawatt Ilijan power plant ends this year, Ang said. It also expects 14 billion pesos in savings when its lease for the 1,200-megawatt Sual plant terminates in 2024.

These savings will be more than enough to offset the 15 billion peso loss the company incurred from a fixed-price supply contract with Manila Electric Company “assuming we don’t go out and continue to carry the cost,” Ang said. Regulators in late September rejected SMC Global’s petition to raise tariffs to recover higher coal costs, which surged to $440 per metric ton from $65 when it entered into the supply contracts in 2019.

Other Highlights

  • “All the refinancing of San Miguel group of companies is done. We saw the situation might not improve after the crisis, so we went full blast on refinancing,” Ang said
  • SMC Global Power has $198 million in bonds callable in December and $367 million callable in 2023, according to data compiled by Bloomberg
  • Next year, two power plants with a combined capacity of 2,500 megawatts and 1,000 megawatts in battery storage projects will come online, adding to revenue

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