INFRASTRUCTURE conglomerate Metro Pacific Investments Corp. (MPIC) will invest more than P13 billion to boost its direct ownership in power utility giant Manila Electric Co. (Meralco), the company told the local bourse.
A disclosure to the Philippine Stock Exchange showed on Tuesday that Beacon Electric Asset Holdings Inc. (Beacon) will sell 56.35 million shares or 5 percent of Meralco to MPIC at a price of P235 per share. That means a total investment cost of P13.24 billion.
Beacon is a special purpose company jointly owned by MPIC and PLDT Communications and Energy Ventures (PCEV).
Meralco is the biggest electricity distributor in the Philippines, while PCEV is a holding company whose primary asset is its holdings in Meralco, now held indirectly through Beacon.
Upon completion of the acquisition, MPIC will own 5 percent in Meralco directly and through Beacon a further 22.48 percent thereby taking its effective interest in Meralco to 27.48 percent.
Initially, MPIC will have to pay P3.0 billion to Beacon immediately, while the remaining balance of P10.24 billion should be paid on or before February 2015.
“The deepening of our investment in Meralco is reflective of our expectation of growth in this business, especially from much-needed power generation in Luzon,” Jose Ma. Lim, chief executive officer, said in a statement.
“MPIC retains its partnership with PCEV for holding most of our investment in Meralco while increasing committee participation in the business as a result of our direct holding,” he further said.
Meanwhile, MPIC is also investing P4.5 billion to increase its shareholding in the Don Muang Tollway (DMT) in Bangkok to 29.45 percent.
According to Lim, all the current investments being done by MPIC will be funded through a combination of internally generated funds and debt.
“Through a combination of our previously announced hospitals group dilution or sell down, cash in hand, and borrowings, we are able to fund these investments on our existing capital base,” Lim added.