Philippine Postal Corp to issue P5 Billion worth of bonds to raise funds for its modernization program

State-Owned Philippine Postal Corp. plans to issue P5 billion worth of bonds this year to raise funds to finance its modernization program and pare down debt. Postmaster General Diomedio Villanueva said in a telephone interview yesterday that the state agency was in the process of selecting a financial adviser and lead underwriter for the bond issue. Eight to nine financial institutions have submitted proposals to handle the bond issue, he said. The chosen financial group will recommend to PPC the ideal structure and terms of the planned borrowing. Other steps that the PPC has to undertake for the bond issue include getting a sovereign guarantee for the bonds and securing approval of the Department of Finance and the Monetary Board of the Bangko Sentral ng Pilipinas. ‘There are a lot of things that had to be done. Our target is for the bond flotation before the end of the year,’ Villanueva said. PPC’s board has already approved the issuance of the bonds. Villanueva cited the need for PPC to upgrade or replace its existing equipment, which included decades old sorting machines and vehicles. He also said that it was necessary for the postal firm to be automated and computerized. Part of the P5 billion would also be used to refinance debt, he added. Based on its financial statements audited by the Commission on Audit, PPC had incurred a net loss of P46 million and had a net worth of P3.718 billion in the year 2000.