Metro Pacific hikes indirect stake in MeralcoBy Doris C. Dumlao |Philippine Daily Inquirer
MANILA, Philippines—Infrastructure holding firm Metro Pacific Investments Corp. has acquired P3.56 billion worth of preferred shares of Beacon Asset Holdings, the holding company for the controlling stake in power distributor Manila Electric Co.
The preferred shares in Beacon, equivalent to 282.21 million, were acquired from Philippine Long Distance Telephone Co. subsidiary PLDT Communications and Energy Ventures Inc. (PCEV), formerly known as Pilipino Telephone Corp.
“As a result of the transaction, each of MPIC and PCEV’s investment in Beacon preferred shares will amount to P11.57 billion,” MPIC told the Philippine Stock Exchange.
The transaction thus re-balances the indirect stake in Meralco held by MPIC and PCEV, both among the Philippine companies controlled by First Pacific Co. Ltd. which is in turn led by Filipino businessman Manuel V. Pangilinan. By increasing its stake in Beacon, MPIC is also expected to capture a bigger share of Meralco’s profits.
Beacon was created as a joint venture between MPIC and PCEV to hold the shares in Meralco mostly bought from the Lopez family, allowing Pangilinan’s group to consolidate investments in a sector believed to have a significant growth potential as the Philippine economy grows.
Beacon owns at least 48.02 percent of Meralco but as Beacon and the Lopez groups vote as a bloc in Meralco, Pangilinan’s group effectively controls at least 51.92 percent of voting rights in Meralco even if corporate rival San Miguel Corp. and its allies still own a significant bloc of at least 34 percent.
MPIC grew its first-quarter net profit by 91 percent year-on-year to P1.57 billion as earnings contribution from its power and water distribution businesses jacked up revenues. Excluding one-off items, three-month core net profit went up by 40 percent to P1.59 billion. Meralco contributed P534 million or 28 percent of MPIC’s core net income in the first quarter.