SMC pursues sale in 2014 of power unit stake for $1B

Conglomerate San Miguel Corp. will pursue the sale of 49 percent of its power generation unit for as much as $1 billion, through an initial public offering next year.

Apart from bringing SMC Global Power Holdings Corp. to public hands, SMC is on the prowl for more acquisitions in the power business to boost this unit’s portfolio, SMC president Ramon S. Ang said in a chance interview Friday.

The listing by introduction of SMC’s controlling stockholder Top Frontier Investment Holdings Inc., meanwhile, is expected to happen by the first or second week of January, Ang told reporters.

The Philippine Stock Exchange and the Securities and Exchange Commission have both approved the listing by way of introduction of Top Frontier, which is listing at an initial price of P178 per share.

SMC, meanwhile, is expected to post a net profit of about P39 billion this year compared to P27 billion in 2012, the conglomerate disclosed to the PSE day.

In the first nine months of the year, SMC’s net profit declined by 60 percent year-on-year to P7.5 billion due to foreign exchange losses. In early December, however, SMC completed the sale of a 27-percent stake in Manila Electric Co. to the Gokongwei group for P72 billion, a transaction that is expected to shore up its bottom line for 2013.

On SMC Global Power’s stock debut, Ang said: “It’s not a problem to raise funds because there’s a queue of potential investors. It’s more of the acquisitions that we’re looking at.”

Ang later said in a text message that SMC was keen on selling to the public a 49-percent stake in the power generation unit for as much as $1 billion.

SMC Power entered the power industry in 2009 through the acquisition of power-generation assets privatized by the government.

It has since built a portfolio that now accounts for 17 percent of the national grid and 22 percent of the Luzon grid.