SMC boosts Meralco stake to 32.39%

MANILA, Philippines - San Miguel Corp. concluded yesterday the purchase of 62.99 million shares of Manila Electric Co. from the Social Security System, effectively increasing its indirect ownership in the power utility giant to 32.39 percent.

In a disclosure to the Philippine Stock Exchange yesterday, San Miguel said the shares were crossed via a special block in favor of unit SMC Global Power Holdings Corp. at P90 each share or a total of P5.67 billion. The transaction was in pursuant to an agreement signed by Global 5000 Investment and the state pension fund in January 2009.

The shares represent around 5.6 percent of Meralco’s outstanding capital stock.

Meralco closed at P243 yesterday, 3.6 percent lower than Monday’s close of P246.60.

Global 5000 took center stage in 2008 when it purchased Meralco shares as a voting ally of San Miguel. Its major shareholders are businessmen Iñigo Zobel, former Trade Minister Roberto Ongpin and condiments king Joselito Campos, all key players behind Top Frontier Holdings Inc., the dominant voting bloc in San Miguel.

The group of telecommunications magnate Manuel V. Pangilinan, through Beacon Asset Holdings Inc., holds a controlling stake in Meralco at 48.02 percent.

Global 5000 paid P1.133 billion to SSS as downpayment, with the balance paid out in three tranches.

The state pension fund sold the shares when the market price then was at P59.5 per share, for a hefty P1.92-billion premium.

Meanwhile, San Miguel disclosed that it was contemplating on selling Series 2 preferred shares but did not indicate how much it was planning to raise from the fund-raising activity.

San Miguel said its board approved the issuance of 1.1 billion Series 2 preferred shares with a par value of P5. Also approved was an increase in the conglomerate’s authorized capital from P22.5 billion to P30 billion, divided into 3.79 billion common shares.

Based on its filing with securities regulators, the Series 2 preferred shares shall be issued in tranches as the board may determine.

San Miguel, one of the largest companies in the country in terms of market capitalization, invested at least $3 billion since 2007 to move away from its traditional food and drinks businesses and venture intofaster-growing sectors such as power, fuel and oil, telecom, mining, banking, property development and infrastructure. It recently added airlines into its business portfolio with the acquisition of a 49 percent stake in Trustmark Holdings Corp. and Zuma Holdings & Management Corp., the holding companies of flag carrier Philippine Airlines and its sister budget airline Air Philippines Corp., respectively.

In 2011, the San Miguel Group accounted for about 4.18 percent of the country’s gross national income and 5.5 percent of gross domestic product.