SMC Global inks ALECO deal, eyes PSE listing next year

MANILA, Philippines - SMC Global Power Holdings Corp., the power generation subsidiary of diversified conglomerate San Miguel Corp. (SMC), is eyeing to list its shares on the stock exchange by the first quarter of next year, SMC president Ramon Ang said yesterday.

On the sidelines of a signing ceremony yesterday for SMC Global’s takeover of Albay Electric Cooperative (Aleco), Ang said SMC Global would definitely enter the local bourse.

“Definitely, it will go for a listing in the PSE (Philippine Stock Exchange),” Ang told reporters.

In addition, he said SMC Global is also in talks with an interested investor for an equity stake in the company.

He said under the plan, SMC may sell 39 percent to an investor and 10 percent to the public.

Options include an initial public offering (IPO) or an equity sale to an interested investor.

“Actually we are in talks with several foreign and local investors,” Ang said.

Proceeds, he said, would be used to fund investment opportunities in the future.

Last July, SMC Global already broke ground for its 600-megawatt coal-fired power plant in Davao.

Ang said that the company is on track to completing the plant in 2015.

The power plant to be built in Malita, Davao will help balance the power supply differential between north and south Mindanao and provide reliable and continuous supply of electricity at a lower cost, the company earlier announced.

The plant aims to help address the growing power crisis in the island, which is currently facing shortages of up to 10 hours, depending on the area. The nearby Visayas region is also facing shortages.

“As demand in both regions are expected to grow, SMC Global Power is looking to help close the gap,” Ang said.

The power plant, the fourth in the company’s portfolio, is the first plant in the region. It will have an initial capacity of 150 MW and may be upgraded to its full capacity of 600 MW.

SMC Global said the plant would use locally sourced coal from SMC-owned mines in Mindanao.

SMC Global is investing $1.5 billion for the construction of its two new power plants – the Mindanao plant and a 600-MW plant in Bataan.

In just four years, SMC Global has become one of the largest independent power generation companies in the country, with an installed capacity of 2,545 MW, the company said.

As of 2012, it already cornered a 17 percent market share of the power supply of the national grid and 23 percent share of the Luzon grid.

Meanwhile, SMC Global, said it would likely participate in the bidding for other ailing electric cooperatives following its successful entry in debt-ridden Aleco.

SMC’s takeover of Aleco was signed yesterday, with the actual takeover taking place within the next 60 days or by Dec. 26.

“We are interested to join any bidding…for any possible government projects,” Ang said, adding that these include electric cooperatives.

“But right now we still don’t know which ones,” he said.

For Aleco, SMC will pour in an initial P600 million to fund the capital expenditure requirements for the next three years and the separation pay of employees affected by the takeover.

Albay Governor Joey Salceda said that ultimately, SMC’s entry would help benefit the province of Albay because power service would improve without raising rates.