MVP Group consolidates holdings in Meralco

MANILA, Philippines - The group of telecommunications magnate Manuel V. Pangilinan is further consolidating its holdings in Manila Electric Co. (Meralco) to maximize the full value of its investment in the power retailing giant.

The Pangilinan-led group, through Beacon Electric Asset Holdings Inc., the holding company for the shares of Metro Pacific Investments Corp. (MPIC) and PLDT Communications & Energy Ventures Inc. (PCEV), is acquiring an additional stake to bring its total economic and voting interest in the power utility firm to 45.352 percent.

In its disclosure to the Philippine Stock Exchange yesterday, MPIC said Beacon will acquire from PCEV 68.8 million shares, comprising approximately 6.1 percent of Meralco, at P220 each share, for an aggregate consideration of P15.136 billion.

PCEV, in turn, will subscribe to 1.199 billion preferred shares worth P15.136 billion.

Jose Ma. K. Lim, chief executive officer of MPIC and president of Beacon, said the move “consolidates the wider group’s shareholding into Beacon Electric so that both MPIC and PCEV shareholders enjoy the full value of our Meralco investment.”

Meralco, the biggest electricity distributor in the Philippines, plans to spend P11 billion annually starting this year until 2014 to expand its distribution business. It has also earmarked about $2 billion until 2016 for new power plants with total capacity of 1,500 megawatts.

The power firm, also partly owned by San Miguel Corp. and Lopez Group, reported a 25.6 percent growth in net income for the first half this year to P6.09 billion, mainly driven by a higher distribution charge.

Core earnings, which strip out currency and derivatives related items, climbed 34.7 percent to P7.8 billion in the first half.

Meralco expects its core net income to rise 15 percent this year to P14 billion.