MPIC set to complete purchase of 10.17% Meralco stake this month
By Zinnia B. Dela Pena, The Philippine Star | 05/28/2009 1:24 AM
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Metro Pacific Investments Corp., (MPIC) the local flagship of Hong Kong-based conglomerate First Pacific Co. Ltd., is hoping to complete its acquisition of the 10.17-percent interest held by Philippine Long Distance Telephone Co.’s retirement trust fund in Manila Electric Co. (Meralco) this month, according to a top company official.
“We’re still threshing out some things but hopefully we can finalize it this month”, said MPIC president Jose Ma. Lim at the sidelines of Manila Electric Co.’s annual shareholders’ meeting Tuesday.
Lim said the proposed transaction will also include the purchase by MPIC of the shares held by First Pacific in the country’s largest power distributor.
The move is aimed at strengthening the group’s position as a significant player in the various areas of the infrastructure industry. It is seen to complement MPIC’s existing investment in the road, water and hospital sectors represented by controlling interests in North Luzon Expressway, Maynilad, Makati Med and Davao Doctors.
Part of the proposed transaction is for the PLDT Beneficial Trust Fund (BTF) to subscribe to new MPIC shares which will make the trust fund a significant shareholder in MPIC.
Subject to approval of MPIC’s board of directors, the final terms and conditions of the transaction is expected to reflect BTF’s acquisition cost of its shares of Meralco, and a current valuation of MPIC.
The BTF has invested a total of P10.3 billion for the purchase of its Meralco shares.
First Pacific is the biggest single shareholder of PLDT with a 26.4-percent stake.
By virtue of that interest, First Pacific is able to exert significant influence over the operating and financial policies of PLDT.
MPIC is open to acquiring more shares in Meralco “so as to develop its position as a strategic shareholder of Meralco with appropriate board and management participation and to enable MPIC to equity account for the results of Meralco.”
“The possible operational synergies in terms of Meralco’s subscriber base, accessible data centers, wireless bill payments and other economies of scale will enhance customer service response and speed up the coordination systems within the group,” MPIC earlier said.
The PLDT group’s total shareholdings in Meralco reportedly stands at 34 -35 percent while the Lopez family, which used to be the biggest shareholder of the utility giant, retained a 13.4-percent stake.
From P59.50 in end-December, Meralco’s share price has risen to as much as P129 this year. It closed unchanged yesterday at P107 apiece.
Meralco retails electricity to about 25 percent of the Philippines’ population of 90 million, including Manila and surrounding provinces that together account for more than half the country’s economic output.
PLDT said Meralco could offer “prepaid electricity as well as wireless bill payments and meter readings” using its telecoms expertise.
PLDT would also explore offering broadband Internet services using Meralco’s power lines.
In 2008, Meralco generated revenues of P191 billion and a net profit of P3.1 billion. It has a total asset base of P178 billion and total debt of P21 billion.
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