by James Loyola – May 27, 2016
from Manila Bulletin
The Ty family’s flagship GT Capital Holdings Inc. is acquiring 15.6 percent of Metro Pacific Investments Corporation which will, in turn, buy control over GT Capital’s Global Business Power Corporation in a deal worth P29.89 billion.
In an interview, MPIC chairman Manuel V. Pangilinan said MPIC’s acquising of a 56 percent stake in Global Business Power will give them the opportunity to invest in power generation in Visayas and Mindanao.
He explained that, affiliate Manila Electric Company will continue to focus on generating power in Luzon which is where its power distribution market is. Meralco also owns 22 percent of GBPC.
Global Power is the leading power supplier in Visayas with an aggregate 852 MW of coal and diesel powered generating capacity at present and 670MW for further expansion.
GT Capital acquired 3.6 billion new common shares in MPIC at P6.10 per share amounting to a stake of 11.4 percent on an expanded capital base for a total cash consideration of P21.96 billion.
It also acquired a further 1.3 billion common shares in MPIC from Metro Pacific Holdings, Inc. (MPHI), a Philippine affiliate of First Pacific Company, at the same price, for a total of P7.93 billion in cash.
These transactions result in GT Capital holding an overall stake of 15.6 percent of the common share capital of MPIC in a new business alliance between the two business groups.
Immediately prior to the issue of new common shares by MPIC, MPHI subscribed to 4.1 billion newly issued Class A voting preferred shares in MPIC at par value for a total consideration of P41.3 million. Following these transactions, MPHI holds a voting interest in MPIC of 55.0 percent and an economic interest of 42.0 percent.
At the same time, Beacon Electric Asset Holdings Inc., a 50-50 joint venture between PLDT and MPIC, acquired from GT Capital 56 percent of Global Business Power for P22.1 billion.
This will be settled with P11.0 billion in cash on closing and the balance via a vendor financing facility to be replaced within 90 days of closing by long-term bank debt.
In an interview, MPIC chairman Manuel V. Pangilinan said they will also use Beacon’s existing cash and cash from the stock sale to GT Capital to acquire more Meralco shares from PLDT.
Pangilinan, who is also PLDT and chief executive, explained that PLDT’s investment in Meralco, which was made in 2009, has already “ripened” and the time has arrived for PLDT to considering selling it at the “right price.”
He said MPIC is discussing the deal with PLDT and “we are quite optimistic the agreement will be forged with PLDT soon.”
Pangilinan said “this investment has strengthened MPIC’s finances and together we will work to accelerate our investment in, and development of, the infrastructure of our country.”
GT Capital vice chairman Alfred V. Ty said that, “with this investment, GT Capital now becomes the strategic investor of MPIC, a dynamic growth company embedded in the most critical sectors of power, water, toll roads, railways and healthcare.”
Meanwhile, GT Capital vice chairman Francisco C. Sebastian said “the GT Capital-MPIC business partnership creates opportunities for synergies. We are excited with the possibilities arising from this alliance.”
MPIC president Jose Ma. K. Lim “we are positive about deepening our investment in the power sector in the Philippines. Although there may be some near-term modest capacity surplus, it is clear that our low per capita power consumption and continuing rapid economic growth combine to mean the outlook for the sector is positive in the medium to long term.”