Meralco unit seals P7.15-B purchase of Global Power

MANILA, Philippines - Meralco PowerGen Corp. (MGen), the power generation unit of Manila Electric Co. (Meralco), has acquired the 20 percent stake of First Metro Investment Corp. (FMIC) in Global Business Power Corp. for P7.15 billion.

In a disclosure to the Philippine Stock Exchange yesterday, Meralco said MGen and FMIC have signed a shareholders’ agreement to complete the sale of FMIC’s 20-percent stake in Global Power, a power company owned by George Ty’s Metrobank Group.

“The SHA was signed together with GT Capital Holdings Inc. (GT Capital), ORIX Corp. of Japan and Global Power. The transaction is valued at P7.15 billion,” Meralco said.

Global Power chairman Francisco Sebastian said the partnership with Meralco would help the company strengthen its power business.

 â€œHaving completed 10 years of operations, Global Power emerges into a new world of opportunities as it broadens and deepens its commitment in the power sector. We are privileged to have Meralco as a strategic partner, not just for its heft and financial muscle but for our shared vision of empowering the economic progress of our country and the uplifting, through light and power, of the lives of our countrymen,” he said.

MGen president Oscar Reyes, for his part, said the partnership will combine the expertise of both companies.

“The completion of the deal seals a strategic alliance that will combine the resources and expertise of both MGen and Global Power to respond to the growing need of ensuring a stable supply of reliable and cost-competitive power for the country, particularly the Visayas and Mindanao,” he said.

MGen is a wholly-owned subsidiary and the power generation arm of Meralco while FMIC is the investment banking subsidiary of Metropolitan Bank and Trust Co. (Metrobank).

Global Power, on the other hand, is an independent power producer in the Visayas. It currently owns and operates nine power plants with a total installed capacity of 627 megawatts (MW).

From a 230-MW mainly bunker fuel capacity in 2006, the company has completed a 410-MW expansion program for its plants, utilizing clean coal-fired technology.

The sale follows the purchase by ORIX of 20 percent of Global Power last June.

Early this year MGen and Global Power signed a memorandum of understanding (MOU) to pursue selected power generation projects in Mindanao.