San Miguel reaps $400M in power sale

MANILA — Philippine conglomerate San Miguel Corp. said Friday it sold part of its minority stake in the country’s main electricity retailer for nearly $400 million.

The Manila Electric Co. share sale gives rapidly diversifying San Miguel extra money to invest in projects where it will have majority control, securities analyst Ian de Leon told AFP.

“San Miguel has been planning to raise funds for more investments in capital-intensive areas like infrastructure and power generation,” de Leon told AFP.

San Miguel said in a statement that it raised about P17.37 billion ($399.5 million) from a private placement of 64.33 million shares of Manila Electric, priced at P270 a share.

It did not disclose the identity of the buyers, nor say where the money raised would be used.

A spokeswoman for San Miguel did not respond to a request for comment by AFP.

De Leon estimated the share block comprised a six percent stake in Manila Electric, the exclusive retailer of electricity to the nation’s capital and surrounding provinces.

These areas account for more than half the country’s economic output.

San Miguel and its subsidiaries had built up a stake of around 33 percent in Manila Electric between 2008 and 2009 at P90 a share.

However, the group failed to secure management control of the utility, and San Miguel officials have since said they were open to selling it.

Over the next four years Manila Electric’s share price more than tripled, closing at P302.40 on Wednesday. The price dropped to P280.40 in morning trade Thursday as the market adjusted to the news of the share sale.

De Leon said he expected San Miguel to unload more of its Manila Electric shares over the coming months.

The San Miguel group made its name as the nation’s main brewer, but now has a diverse business covering food, infrastructure, property and energy and is the country’s largest conglomerate.

It also last year took a 49-percent stake in national carrier Philippine Airlines.