Manila, Philippines - Metro Pacific Investments Corp. (MPIC), the local flagship of Hong Kong-based conglomerate First Pacific Co. Ltd., has increased its indirect stake in power utility giant Manila Electric Co. with the purchase of P3.56 billion worth of preferred shares of Beacon Asset Holdings Inc.
Beacon, a joint venture between First Pacific units MPIC and Philippine Communications & Energy Ventures, holds a controlling stake in Meralco at 48.02 percent.
In a disclosure to the Philippine Stock Exchange yesterday, MPIC said it acquired from PCEV 282.21 million preferred shares in Beacon.
“As a result of the transaction, each of MPIC and PCEV’s investment in Beacon preferred shares will amount to P11.57 billion,” MPIC said.
By raising its stake, MPIC will grasp a larger share of Meralco’s profits, which, in turn, should boost the holding firm’s bottom line as it sees significant growth in the power sector given an improving local economy.
Meralco is currently focused on growing its current business and investing in new areas such as power generation, aimed at enhancing shareholder value and providing efficient and upgraded services for the public.
The Manuel Pangilinan-led group has taken over Meralco through the purchase of shares from the Lopez family, which is now left with a 3.9 percent stake in the power distributor. Diversifying conglomerate San Miguel Corp. is the second biggest shareholder with a stake of at least 34 percent.
Meralco reported a five percent rise in consolidated core net income in the first quarter to P3.4 billion from P3.3 billion, driven by a 10 percent hike in volume of electricity sold. Revenues grew 16 percent to P65.6 billion.
Sales volume increased to 7,687 gigwatt-ghours due to the higher number of billed customers, which reached 5.07 million as of end March.
The improved earnings was also attributed to a better than expected economic environment, continuing strong inflow of remittances from overseas Filipinos and revenue inflows of business process outsourcing entities.
Meralco accounted for P534 million or 28 percent of MPIC’s core net income in the first quarter.
The power utility giant is eyeing a net income of P15 billion this year as it sees sales volume rising three percent.