Lopez Group considers sale of Meralco stake

The Lopez Group intends to revisit plans of disposing its stake at Manila Electric Co. (Meralco) amid continuing controversies being faced by the power utility firm, a top company official said yesterday.

Oscar Lopez, chairman of the Lopez Group, told reporters during a forum sponsored by the Foreign Correspondents Association of the Philippines (FOCAP), said the sale option is still being explored by the company.

"If the price is right, we will (divest our shares). If there is a good offer, we will (sell)," he said

Meralco is 23 percent owned by a venture of Spain’s Union Fenosa and the Lopez family’s First Philippine Holdings Corp.

Union Fenosa holds roughly nine percent; government owns about 25 percent; while the rest is owned by the public and other investors.

Lopez noted that the power distribution firm’s operations have been severely affected by judicial issues such as decisions by the Supreme Court. "We continue to have a problem in courts."

The High Tribunal’s rulings have taken a huge toll on the country’s largest private power distributor’s finances. The Supreme Court two years ago ordered Meralco to refund some P30-billion worth of alleged "excess charges." The company is still paying the refund and is expected to complete the process in three years’ time.

The SC had also nullified the second generation rate adjustment mechanism (GRAM) application of Meralco which will also result to the refund of over P800 million to its consumers.

In 2005, Union Fenosa had expressed "strong disappointment" and was "getting restless" in its investment in Meralco and wanted to "sell out."

Aside from Meralco, Lopez said they continue to look for a buyer for its telecom subsidiary Bayan Telecommunications Inc. (BayanTel).

While the SC rulings had severely affected Meralco’s financial position, BayanTel suffered huge losses due to its dollar dominated loans. The company was forced to seek court action for corporate rehabilitation in 2003.