Metro Pacific Investments Corp., an infrastructure holding company led by businessman Manuel V. Pangilinan, is buying 5 percent of Manila Electric Co. (Meralco), the country’s biggest electricity distributor, from an affiliate for P13.24 billion, a stock exchange filing Tuesday showed.
Metro Pacific said it would acquire the 56.35 million shares of Beacon Electric Asset Holdings Inc., a special purpose company jointly controlled by Metro Pacific and PLDT Communications and Energy Ventures, for P235 a share—a 7.8-percent discount from its closing price the previous day.
Meralco shares rose 0.71 percent to P254.80 a share Tuesday while Metro Pacific was up 0.40 percent to P5.07 a share.
Philippine Long Distance Telephone Co., which owns PLDT Communications and Energy, rose 0.21 percent to P2,868 a share as the broader Philippine index rose by 0.46 percent.
Upon completion, Metro Pacific will own 5 percent in Meralco directly, and a further 22.48 percent through Beacon, thereby taking its effective interest in Meralco to 27.48 percent.
PLDT Communications and Energy interest in Meralco will be reduced to an effective interest of 22.48 percent.
Because ownership was merely being transferred within the group, there will be no change in the aggregate interest of Metro Pacific and Beacon in Meralco, which remains at 49.96 percent.
Other major shareholders of Meralco are the Gokongwei family’s JG Summit Holdings, with a 27.1-percent stake, and the Lopez family’s First Philippine Holdings, with a 3.9-percent stake.
“The deepening of our investment in Meralco is reflective of our expectation of growth in this business, especially from much needed power generation in Luzon,” Metro Pacific CEO Jose Ma. K. Lim said in a statement.
“Metro Pacific retains its partnership with PCEV for holding most of our investment in Meralco while increasing committee participation in the business as a result of our direct holding,” Lim added.
The consideration payable by Metro Pacific to Beacon “will be settled at P3 billion immediately and the balance on or before February 2015,” according to the regulatory filing.
“Metro Pacific will receive a dividend from Beacon at the same time as it settles payments for this transaction such that MPIC’s net cash investment in the transaction will be P6.6 billion, which [Metro Pacific] will fund from internal sources,” the company added.
The company is also investing P4.5 billion to increase its shareholding in the Don Muang Tollway (DMT) in Bangkok to 29.45 percent as previously announced.
Furthermore, pertaining to its current 55-percent interest in the Light Rail Manila consortium, Metro Pacific may decide to invest up to P8.5 billion in equity and shareholder loans\ over a five-year period.
The group was the sole bidder for the government’s Light Rail Transit 1 maintenance and track extension.
“Through a combination of our previously announced hospitals group dilution/selldown, cash in hand and borrowings, we are able to fund these investments [through] our existing capital base,” the company CEO said in the statement.
Apart from Meralco, Metro Pacific Investments holds various infrastructure assets, like North Luzon Expressway and Maynilad Water Services Inc.
Metro Pacific also owns a chain of hospitals including Makati Medical Center and Asian Hospital, both in Metro Manila.