SMC mulling over selling 49% share in Meralco unit

by Lenie LecturaJuly 14, 2016

from Business Mirror

SAN Miguel Corp. on Thursday said it was considering selling up to 49 percent of its interest in a power investment in Pangilinan-led Manila Electric Co. (Meralco).

In a disclosure to the Philippine Stock Exchange, the conglomerate said it is in talks with Meralco for the sale of up to 49 percent of SMC affiliate South Premier Power Corp. (SPPC), the independent power-producer administrator (IPPA) of the Ilijan natural gas-power plant.

The planned sale, SMC said, is still subject to the resolution of the pending case instituted by SPPC against the Power Sector Assets and Liabilities Management Corp. (PSALM).

PSALM earlier terminated SPPC’s IPPA contract because the latter failed to pay the outstanding generation payments from December 26, 2012, to April 25, 2015, amounting to P6.46 billion, the state firm said.

As part of PSALM’s decision to terminate the contract, the state firm also moved to seize the $60-million performance bond of SPPC.

However, SMC was able to score a preliminary injunction against PSALM.

The order enjoins PSALM “from further proceeding with the termination of the IPPA agreement between SPPC and PSALM while the main case is pending.” This means PSALM cannot cancel the contract “for the duration of the trial until a decision on the merits is reached,” SMC had said.

SMC President Ramon Ang and Meralco Chairman Manny Pangilinan earlier partnered for a power project.

Meralco Powergen Corp., the power-generation arm of Meralco, acquired a 49-percent stake in Mariveles Power Generation Corp., a wholly-owned subsidiary of SMC Global Power Holdings Inc.