Voting trust pact cements Lopez hold on Benpres, FPHC

While there is no imminent threat against the Lopez management of Benpres Holdings Corp. and First Philippine Holdings Corp., the family has deemed it necessary to aggregate their shares in a voting trust to safeguard control of the two companies, a top official of FPHC said.

“There is no immediate threat but better safe than sorry, “ said Elpidio Ibanez, president and chief operating officer of FPHC.

Learning from the experience of Manila Electric Co earlier this year which pitted the Lopez family against state pension fund Government Service Insurance System, the Lopez group realized that Benpres and FPHC as publicly-listed companies could also be attractive takeover targets for acquiring firms as their values have been eroded with the downturn in world financial markets.

Prior to GSIS’s sale of a 27 percent stake in Meralco to Southeast Asia’s largest conglomerate San Miguel Corp., GSIS chief Winston Garcia had accused the Lopez Group of mismanaging the utility firm.

“When GSIS entered Meralco, we thought it would boost shareholder value. We didn’t expect something like that to happen but it did. With the entry of San Miguel, we are confident they can help unlock the full potential of Meralco.

The Lopez Group currently holds 33.4 percent of Meralco while San Miguel owns 27 percent. Investment firm Global 5000, which is believed to be affiliated with former trade and industry car Roberto V. Ongpin, owns 10 percent

The Lopez family controls Meralco’s 11-man board of directors.

San Miguel’s entry into Meralco marked the end of government’s more than three decades’ old control of the power sector.

The government’ stake in Meralco has long been in the list of government assets to be disposed to shore up government’s liquidity position.

Benpres president Angel S. Ong said the voting agreement indicates the need to be vigilant against parties looking to acquire Benpres or FPHC.

Only two government corporations are left with insignificant holdings in Meralco — the Philippine Health Insurance Corp. (with 0.17 percent) and the Home Development Mutual Fund, or Pag-IBIG Fund (with 0.15 percent.)

Ong, said the appointment of Lopez, Inc., as voting trustee with respect to FPHC (FPHC) shares owned by Benpres, is nothing new. He said the objective of the voting trust agreement is to consolidate holdings and ensure the stability of operations and continuity of existing management.

Benpres owns 46 percent of FPHC while Lopez Inc. holds a 54.61 percent stake in Benpres.

FPHC is a holding company whose core businesses are power and infrastructure, with strategic initiatives in manufacturing and property. Its power generation subsidiary, First Gen Corp., is now the largest vertically-integrated power generation company in the Philippines with an installed capacity of 2,582 megawatts, accounting for approximately 16 percent of total installed capacity in the country today.

Its power distribution associate, Manila Electric Co., has a franchise area producing 50 percent of the country’s gross domestic product (GDP) and servicing 60 percent (about four million customers) with electricity.