Gokongwei Group expands power assets by buying Ty’s, Meralco’s energy business

by VG CabuagJuly 1, 2016

from Business Mirror

THE Gokongwei-led JG Summit Holdings Inc. on Friday said it is acquiring a 30-percent stake in Global Business Power Corp. from GT Capital Holdings Inc. and Meralco PowerGen Corp.

JG Summit said it is acquiring the stake for P11.82 billion, as it expands its participation in the country’s power-generation sector, which previously was limited to cogeneration under food unit Universal Robina Corp.

In its disclosure to the Philippine Stock Exchange (PSE), JG Summit said it has agreed to buy 577.21 million shares of Global Power, equivalent to 30 percent of the company, at P20.47 per share, which is based on the enterprise value of the investment.

Of shares to be acquired, 423.28 million will be from GT Capital and 153.92 million from Meralco PowerGen.

Global Power is one of the leading independent-power producers in the Visayas region and Mindoro island with a combined gross-maximum capacity of 704 megawatts (MW), comprising 696.5 MW of power supplied to the Visayas grid and 7.5 MW of power supplied to Mindoro island.

In a separate disclosure to the PSE, GT Capital said it bought a 22-percent stake in Global Power from Orix P&E Philippines Corp. and sold it to JG Summit for P8.6 billion in cash. Meralco PowerGen sold an 8-percent interest for P3.22 billion. Manila Electric Co., the power distributor, previously owned a 22-percent stake in Global Power before selling 8 percent to JG Summit.

“The transaction is in line with the tag-along right [TAR] of Orix and the GT Capital Group’s decision to continue its indirect participation in the power industry,” GT Capital said.

The TAR is in relation to the recent sale by GT Capital of its 56-percent stake in Global Power to Beacon PowerGen Holdings Inc., a unit of Metro Pacific Investments Corp. (MPIC) and PLDT, for P22.1 billion.

As part of the deal, GT Capital also acquired 15.6 percent of MPIC in a deal worth P29.89 billion. This allows GT Capital to continue having an indirect stake in Global Power through MPIC’s interests in Beacon and Meralco.

At the end of the transaction, Beacon will still have 56-percent ownership in Global Power; Meralco at 14 percent, down from the previous 22 percent; and JG Summit at 30 percent. Orix will have no more stake in the power firm.