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The Lopez family has sold their hugely profitable
tollways business to Manny Pangilinan of PLDT and Metro Pacific for
P12.26 billion.
The family needs to raise P45
billion to pay for current liabilities incurred for paying a hefty
P58.5 billion for geothermal gas company Energy Development Corp. (EDC)
November last year.
With their pullout from tollways
and highways management, the Lopezes will concentrate on two
areas—energy and broadcast.
No single family or enterprise in
the Philippines has invested more money and more energy in the
energy business than the Lopezes of the 47-year-old First Philippine
Holdings Corp. (FPHC) chaired by Chief Executive Officer Oscar
Lopez, 77.
Oscar is the sixth generation of
Lopezes who have pioneered in the industrialization of the
Philippines and invested in areas characterized by employment of
huge capital, susceptibility to the vagaries of politics and the
marketplace, long-term benefit to the economy, and commitment to
render good to the public. Each investment is a leader and usually,
delivers satisfactory profits.
Oscar’s brother, the late
daring Eugenio “Geny” Lopez Jr., often said the family is in
business to serve the public.
Oscar has been chair and CEO of
First Philippine Holdings since 1986. Before joining First
Philippine Holdings, he was president of Benpres from 1973 to 1986.
Currently, he is also chairman and CEO of Benpres.
He studied at Harvard College and
graduated cum laude (Bachelor of Arts) in 1951. He earned his
master’s degree in public administration at the Littauer School of
Public Administration, also at Harvard, in 1955.
First Philippine Holdings owns
33.4 percent of the Manila Electric Co. (Meralco), the oldest and
largest electricity distribution utility in the country. Meralco
covers an area of 9,337 square kilometers, more than 20 million
people and 50 percent of the country’s gross domestic product.
Meralco generated revenues of
P200 billion and net income of P3.8 billion in 2007.
First Philippine Holdings is
owned 43.2 percent by another Lopez holding company, Benpres
Holdings Corp., which in turn is owned 55.4 percent by Lopez Inc.,
the family’s private holding firm. First Philippine Holdings owns
66.2 percent of First Gen, their energy company.
First Philippine Holdings has a
proven track record in developing projects: nurturing businesses
from inception and growing them to becoming strong industry players
and leaders in their respective fields.
In pursuing its strategy and
objectives, First Philippine Holdings is guided by fundamental and
imperishable values and principles: nationalism, entrepreneurship
and innovation, teamwork, a strong work ethic and corporate social
responsibility.
“We paid a good price for them
[EDC and the additional stake in Meralco], and we came in when the
value-creating potential of those assets were at their highest,”
Oscar Lopez says in justifying EDC’s stiff price. “It is
for us to now unlock and realize that potential for the benefit of
shareholders, as well as our customers.”
Energy Development Corp. is the
Philippines’ largest producer of geothermal energy with installed
capacity of 1,198.8 megawatts and is the reason why the Philippines
is the world’s second largest geothermal producer. EDC has seven
major steam fields in five contract areas in four islands of the
Philippines.
Energy Development Corp. posted a
recurring income of P4.5 billion in the first nine months of 2008,
up 34.3 percent over the same period in 2007. In the whole of 2007,
EDC earned P8.7 billion on revenues of P18.8 billion.
First Gen, the Lopez family’s
energy holding company, is owned 66.2 percent by First Philippine
Holdings. It is the largest Filipino-owned or controlled independent
power producer with installed capacity of 2,582.4 megawatts as of
Dec. 31, 2007, including the 1,000-megawatt Santa Rita Power Plant
(operational since August 2000) and the 500-mw San Lorenzo Power
Plant (established in July 1997)—both gas-fired and both in
Batangas—the 225-mw Bauang Power Plant, the 100-mw Pantabangan
and, of course, Energy Development Corp.
FPHC is the country’s largest
listed corporation in assets, which stood at P252.7 billion as of
end-September 2008, up 79 percent from P141 billion in September
2007 and up 6 percent from P239.5 billion in end-2007.
First Philippine Holdings’s
consolidated revenues increased 45 percent or by P20.2 billion to
P64.8 billion during the first nine months of 2008. Of the P64.8
billion, 86 percent or P55.5 billion came from real estate, 6
percent or P3.87 billion came from toll operations, 4 percent or
P2.3 billion from contracts and services, 2 percent or P1.57 billion
equity earnings from associates, primarily Meralco, and 2 percent or
P1.38 billion from sale of merchandise.
FPHC’s net income decreased 61
percent (P5.7 billion) to P3.6 billion due to higher finance costs
and foreign exchange losses (amounting to P7.1 billion). The large
forex losses drastically reduced return on equity to negative 0.7
percent from 10.3 percent as of end-September 2007.
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