CONGLOMERATE Metro Pacific Investments Corp. (MPIC) on Friday acquired a controlling 56 percent interest in GT Capital Holdings Inc.’s unit Global Business Power Corp., a major power generation player in the Visayas and some parts of Luzon, for P22.06 billion.
The two companies said MPIC, through its associate Beacon Electric Asset Holdings Inc., will acquire 56 percent of Global Power for P22.06 billion, half of which will be paid out in cash upon closing of the deal while the remainder will be settled via a vendor financing facility.
Beacon holds the power assets of MPIC.
In exchange for the controlling stake in its power unit, GT Capital, the Ty family’s holding firm, will obtain a minority stake in MPIC and become its second biggest investor.
Both MPIC and GT Capital voluntarily halted the trading of their shares on Friday to make way for the deal.
“I am delighted to announce this new alliance with GT Capital Group. This investment has strengthened MPIC’s finances and together we will work to accelerate our investment in and development of the infrastructure of our country,” MPIC chairman Manuel Pangilinan said.
As part of the transaction, GT Capital is buying 3.6 billion new common shares of MPIC at P6.10 apiece, for a total price of P21.96 billion. GT Capital bought the shares at a premium as it was trading at the Philippine Stock Exchange at P6.02 per share.
The amount of new shares bought is equivalent to 11.4 percent of the enlarged capital base of MPIC. The transaction still has to be approved by the Securities and Exchange Commission (SEC), although it has already been approved by shareholders in 2015.
In addition, the Ty family’s holding firm will further acquire 1.3 billion shares from Metro Pacific Holdings Inc., MPIC’s majority shareholder, at a purchase price of P6.10 apiece or total of P7.9 billion. The additional acquisition will increase GT Capital’s stake in MPIC to 15.6 percent.
Meanwhile, MPHI will subscribe to 4.1 billion newly issued Class A voting preferred shares of MPIC at par value for a total price of P41.3 million. Following these transactions, MPHI will continue to hold an overall majority stake of 55 percent and GT Capital at 12.1 percent.
“It was MPIC who was looking at the Global Power investment. But through the discussions, it became a win-win for both. Global Power is now part of MPIC, who is a very big force in the energy generation field, so it was a very big fit. So GT Cap allows us to look at the different facets of the Philippine economy in terms of infrastructure,” Alfred Ty, GT Capital’s co vice chairman, said on the sidelines of MPIC’s annual stockholders’ meeting on Friday.
Ty is also an independent director at MPIC.
Officials said MPIC discussions are still ongoing but MPIC may take control of the Ty’s power assets over the weekend.
Meanwhile, MPIC officials said proceeds of the deal — valued at about P29.9 billion — will be used by MPIC to raise its stake in power distributor Manila Electric Co. by acquiring the remaining stake of Philippine Long Distance Telephone Co. (PLDT) which owns 17.4 percent.
Based on Meralco’s current share price of P301 each, those PLDT holdings should be worth about P60 billion.
“From a PLDT perspective, my view is PLDT’s investment in Meralco made in 2009 has already ripened and time has arrived for PLDT to consider selling it. To maintain our control with Meralco, part of the shares of PLDT in Meralco should be sold at the right price,” Pangilinan said, adding that they purchased the Meralco stake in 2009 at P90 apiece.
Global Power is the leading power supplier in the Visayas with an aggregate 852 megawatts of coal and diesel-powered generating capacity, including 150 MW that will commence operations later this year.
The main development project is a 670-MW supercritical coal-fired plant in La Union, Pangasinan with a 600-MW electric purchase power agreement signed with Meralco.