Gokongwei-led JG Summit Holdings Inc. has cemented its partnership with the group of businessman Manuel V. Pangilinan by buying into Global Business Power Corp. (GBPC), a leading independent power generation firm in the Visayas.
JG Summit has agreed to buy 577.21 million common shares or 30 percent of GBPC from GT Capital Holdings Inc. and Meralco PowerGen Corp. for about P11.8 billion, the conglomerate told the Philippine Stock Exchange.
The purchase—which extends JG Summit’s partnership with the Pangilinan-led First Pacific Co. Ltd. beyond crown jewels Manila Electric Co. and PLDT Inc.—had been approved by JG Summit’s board of directors.
GBPC has a combined gross maximum power generation capacity of 704 megawatts (MW), of which 696.5 MW are supplied to the Visayas grid and 7.5 MW serve the requirement of Mindoro island.
JG Summit agreed to buy 423.28 million shares from GT Capital and 153.92 million shares from Meralco PowerGen for P20.47 each.
The transaction accounted for less than 10 percent of JG Summit’s stockholder’s equity as of the end of March.
Pangilinan’s group earlier struck an alliance with tycoon George Ty that allowed First Pacific to take over 56 percent of GBPC for $475 million while raising $171 million by taking in the Ty group as a strategic investor in infrastructure holding firm Metro Pacific Investments Corp.
On the part of GT Capital, the conglomerate unloaded in favor of JG Summit a 22-percent stake in GBPC for P8.6 billion. This followed the acquisition by GT Capital of the 22-percent stake of Orix P&E Philippines Corp. (Orix) in GBPC.
“The transaction is in line with the tag-along right of Orix and GT Capital Group’s decision to continue its indirect participation in the power industry,” GT Capital said in a separate disclosure Friday.
The purchase price was based on an agreed valuation of GBPC as confirmed by an independent third party valuator, GT Capital said.
JG Summit and First Pacific, erstwhile corporate rivals, became business partners in 2011 when the former’s telecom business Digital Telecommunications Philippines Inc. was sold to PLDT in a share-swap deal with an equity value of P74.1 billion. The relationship deepened when in 2013 JG Summit bought San Miguel group’s 27-percent stake in Manila Electric Co., the country’s largest power distribution firm, for P72 billion.