PLDT Inc. said on Wednesday its subsidiary PLDT Communications and Energy Ventures (PCEV) has entered into a share purchase agreement with Metro Pacific Investments Corp. (MPIC) for the sale of PCEV’s remaining stake in Beacon Electric Asset Holdings, Inc.
In a disclosure to the Philippine Stock Exchange (PSE), PCEV said it has sold its remaining 25 percent stake in Beacon for a total consideration of P21.8 billion, which makes MPIC the sole owner of Beacon upon completion of the sale.
Beacon is a special purpose company jointly owned by PCEV and MPIC, which holds a 35 percent interest in Manila Electric Company (Meralco) and a 56 percent interest in Global Business Power Corp. (GBPC).
As a result of the stake sale to MPIC, PCEV will no longer have any direct interest in Beacon and indirect interest in Meralco and GBPC.
MPIC will shell out P12 billion in cash on closing, which is expected to occur within this month. The balance of P9.8 billion is expected to be paid over the following four years.
MPIC will continue to own a direct 10.5 percent interest in Meralco, and through its 100 percent in Beacon, a further 35 percent—thereby taking its effective ownership interest in Meralco from 41.2 percent to 45.5 percent and in GBPC to 56 percent directly and 6.4 percent indirectly.
In 2009, PCEV had invested in Meralco and Beacon with an aggregate amount of approximately P24 billion.
Over the years, PCEV said it has received P14.7 billion in cash dividends and has completed its divestment for an aggregate consideration of P51.6 billion.
As such, PCEV would have received in cash over the period 2.75 times its invested capital.
“The divestment of our Beacon investment will help the PLDT group focus on the key priorities in its core businesses. While the investment is now viewed as no longer strategic, it has nonetheless been a very financially satisfying one,” PLDT Inc. Chairman and Chief Executive Officer Manuel Pangilinan said.
“Proceeds from the sale will be used principally to reduce debt and to fund the ongoing network upgrade and expansion,” he added.
PCEV is a holding company owned 99.9 percent by Smart Communications, Inc. which is a wholly-owned subsidiary of PLDT Inc.
“I am pleased to announce this rationalization and simplification of our power investments,” MPIC CEO Jose Ma. Lim said in a separate disclosure.
“The acquisition of PCEV’s remaining 25% in Beacon, at what I consider to be a very attractive entry price, means that for the first time we have no minority partner in our power portfolio holding company,” he added.
Incorporated in 2006, MPIC has investments in water utilities (Maynilad Water Services Inc.), toll roads (Metro Pacific Tollways Corp. and Manila North Tollways Corp.), electricity distribution (Meralco) and healthcare services (MPIC Hospital Group). MPIC is 55.8 percent-owned by Metro Pacific Holdings Inc.