Meralco forms body to sell non-core, idle assets

The Manila Electric Co. (Meralco) has formed a special committee to review the valuation of the company’s non-core businesses and idle assets worth about P1.5 billion which could be disposed off sometime this year, company officials said.

Meralco chief finance officer Daniel Tagaza said the committee is expected to file its recommendation to the company’s board in the next few weeks. "They will try to rationalize the under-utilized assets and submit a recommendation to the board," he said.

Meralco treasurer Rafael Andrada said they are also looking at divesting some non-core businesses like Batangas Coal.

"Our strategic planning board is looking at some non-core businesses and non-performing assets as one of the options to raise funds to refinance our maturing obligations,"Andrada said.

Aside from the payment of P30.05 billion in refund to its customers as ordered by the Supreme Court on Nov. 2001, the SC once again ruled against the Energy Regulatory Commission (ERC)’s order granting a provisional authority (PA) for Meralco to implement a 12-centavo per kilowatt-hour increase. The increase should have given the firm an additional P240 million in revenues per month.

"We have to go through a process of identifying properties to be sold," Andrada said.

According to Andrada, they would again make new valuations of the assets before presenting it to the board of directors for approval. "There is an urgency but they have to see if the value attached to it is right for the company, of course at the right market condition.

Early last year, Meralco said it needed to sell some of its idle assets but because of prevailing weak market conditions, it has decided to defer the plan.

In June 2003, though, it was able to sell its 2.1-hectare property in Sta. Rosa, Laguna to mall developer SM Prime Holdings Inc. for P129 million.