Apart from Philippine American Life and General Insurance Corp. (Philamlife), the other hot story at last week?s Global CEO Conference of the Management Association of the Philippines?albeit one shared only in whispers?was the growing worry over the Lopez group?s financial condition.
The group?s publicly listed geothermal power producer, First Gen Corp., needs to refinance $700 million worth of short-term loans, with $400 million coming due next month. The funds were used when First Gen bought the controlling stock in Energy Development Corp. (EDC) from the government?s Philippine National Oil Co. for P58.5 billion last November.
Pro-Lopez groups have been going around trying to reassure jittery bankers that 70 percent of the funding has already been raised and that they?re in the process of sealing the balance. But the credit crunch leaves many listeners raising their eyebrows as to whether they?re telling the truth or merely bluffing.
Wherever the Lopezes get the funds?if they get them?don?t expect the money to come in the form of an equity-linked loan. The Lopezes bought EDC at P9.75 a share, and the EDC market price has dropped to P3.05 a share?a whopping 68-percent decline. Daxim L. Lucas
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Cyber war
The website of Lopez group?s publicly listed First Philippine Holdings Corp. was hacked last week, temporarily disrupting its services. The company?s officials said the website was defaced by parties yet unknown, resulting in all sorts of gibberish and text being posted on the site. Fearing that the perpetrators would use the hacked site to deliver viruses or misinformation to the public, the company shut it down for several days.
It remains unclear whether the hacking was a random act (there have been several local attacks in recent months) or?as some in the firm believe?part of the Lopez group?s ongoing fight for control of Manila Electric Co. with the government. Daxim L. Lucas
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Too good to pass up
Jaime Augusto Zobel de Ayala II, known by his initials JAZA, left in a great hurry after his speaking engagement at the Management Association of the Philippines conference last week, where he confirmed the Ayala group?s interest to bid for Philamlife during the Q&A session.
JAZA was to attend an important executive committee meeting of Bank of the Philippine Islands (BPI), of which he is chairman, it was said. According to the grapevine, the agenda was the most exciting M&A opportunity to hit the country in years.
BPI, the oldest bank in Southeast Asia (it was the official issuer of the Philippine peso during the Spanish era), has grown through organic expansion and a long list of acquisitions over the years. Its last M&A was in 2005 when it bought Prudential Bank from the Santos family. Doris C. Dumlao
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M&A catalyst
The interest of the state-run pension fund Government Service Insurance System (GSIS) in Philamlife was something that many analysts didn?t factor in during our early survey of potential suitors.
But those who doubt whether this interest is serious should remember GSIS? influential role in large M&As in recent corporate history: from the time the Go family?s Equitable Banking Corp. gobbled up the much bigger Philippine Commercial International Bank in the late 1990s (before Winston Garcia?s time as GSIS head) to the ouster of the Go family and the eventual takeover of Equitable PCI Bank by the retail tycoon Henry Sy?s Banco de Oro. And don?t forget GSIS? recent dramatic foray into blue-chip Manila Electric Co.. Watch out for the emergence of new tie-ups and consortia. Doris C. Dumlao
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Life after Philam
Philamlife CEO Joey Cuisia was asked during the Management Association of the Philippines? Global CEO Conference about his personal plans after AIG completes the sale of Philamlife, its local crown jewel. It depends on the new owners, Cuisia said.
He dodged a ?multiple choice? question from moderator Twink Macaraig on whether he preferred working for JAZA, Henry Sy or Winston Garcia. (Cuisia must be treading carefully in case it would be any of them.)
But after retirement, Cuisia said, he?d like to spend more time doing non-profit work with outfits like Gawad Kalinga and help Jess Estanislao promote good governance through the Institute of Corporate Directors. Doris C. Dumlao
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Feeling alluded to
The publicist of GSIS president Winston Garcia called last week to react to a blind item that he said was affecting his boss. PR man Willy Fernandez said that yes, Garcia flew to Singapore to watch the inaugural Formula One race there, but with his son (and not a female companion that the blind item linked to this ?influential government financial institution head?).
Moreover, the publicist said that the trip of Garcia and his son to the city-state was paid for by a firm that had ?absolutely no dealings? with the government pension fund.
Incidentally, Development Bank of the Philippines president Reynaldo David also called to say?with his signature mischievous chuckle?that he received one hell of a ribbing from friends who were wondering if he was the ?influential official? referred to. Daxim L. Lucas
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Philex face-off
Market watchers are betting that the state-run pension fund for private-sector employees, Social Security System (SSS)?which recently snatched the spotlight from telecom wizard Manuel V. Pangilinan at Philex Mining Corp.?is not keen on raising its stake in the country?s most profitable gold and copper producer.
For one, the financial costs are enormous. Why court a mass lawsuit from its members to buy Philex at a premium of P1.72 a share based on Tuesday?s closing price of P6.20 each (against the P7.92-a-share offer by Pangilinan-led First Pacific Co.)? The SSS would also need to cough up roughly P1.8 billion to subscribe to its pro-rata share of 24 percent out of the additional shares to be issued by Philex.
SSS head honcho Romulo Neri said Tuesday that pending the receipt of the offer terms, the SSS continued to vacillate on a possible additional investment in Philex as its investment staff studied the revised offer.
But the more compelling talk in the market is that the recent face-off between Neri and Pangilinan over Philex runs deeper than the controversy on the ZTE national broadband network deal (which prompted Pangilinan to block the Neri?s entry onto the board of Philippine Long Distance Telephone Co., which Pangilinan chair).
Talk is that the Philippines? chief executive is not likely to rein in Neri on this issue because she has ?lukewarm feelings? for the telecom magnate ... for supporting her rival in the 2004 presidential election, Fernando Poe Jr. Elizabeth Sanchez-Lacson
With editing by INQUIRER.net
