Meralco unit raises stake in Global Business Power

MANILA, Philippines - Meralco PowerGen (MGen), the power generation subsidiary of Manila Electric Co. (Meralco), will raise its stake in Global Business Power Corp. (GBPC) of the Metrobank Group to 22 percent from the current 20 percent, Meralco president Oscar Reyes said.

“The company is also willing to increase its stake further to 50 percent if the opportunity arises,” Meralco chairman Manuel V. Pangilinan said yesterday.

“Reyes said, Meralco’s board approved the funding for MGen’s acquisition of another two percent stake in GBPC, which will raise MGen’s equity interest in GBPC to 22 percent.”

“This acquisition is providing the company early income accretion and cash generation, while longer lead-time power plants are being developed,” Reyes added.

In a separate interview on the sidelines of Meralco stockholders’ meeting, Pangilinan said it’s a good business and MGen can even raise it to 50 percent if there are stakeholders willing to sell.

“It’s a good business and the Metrobank Group has managed it well so it’s a good investment,” Pangilinan said.

He also said the business is helping address the power crunch in the country.

“They are expanding in Cebu by 82 megawatts and we are building a new plant in Panay of 150 MW,” Pangilinan said, referring to the new coal plant project which GBPC unit Panay Energy Development Corp. is developing in La Paz, Iloilo.

For the additional two percent, Pangilinan said MGen acquired the stake of First Metro Investments Corp. (FMIC), the investment banking arm of the Metrobank Group.

In October last year, MGen acquired the 20 percent stake of FMIC for P7.5 billion.

Asked how much would the additional two percent cost, Reyes said there is no final figure yet.

GBPC is an independent power producer in the Visayas. It currently owns and operates nine power plants with a total installed capacity of 627 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.

Following a share sale agreement last October, the resulting ownership structure of GBPC is now as follows: FMIC with 9.11 percent, Orix with 20 percent, MGen with 20 percent and GT Capital retaining majority ownership at 50.89 percent.

GT Capital is the listed investment holding company of the Ty family, the component businesses of which include GBPC, Metrobank, Toyota Motor Philippines, Federal Land Inc., Philippine AXA Life Insurance Corp. and Charter Ping An Insurance Corp.