Gets 3 electric plants in P200B deal
MANILA, Philippines—San Miguel Corp. has completed its transformation into a power-based conglomerate with its recent P200-billion deal to buy from ally Global 5000 Investments Inc. a controlling stake in the San Roque hydroelectric plant, the coal-fired Sual power plant and the Ilijan gas plants.
San Miguel has wrapped up a deal to buy a unit of Global 5000 that owns the controlling interest in the three power plants valued at P4.3 billion and absorb their combined liabilities worth P193 billion, industry sources told the Inquirer.
The consolidation, which will be reflected in San Miguel’s books in the fourth quarter of this year, was confirmed by San Miguel officials in a briefing for analysts last Friday. This is also in line with San Miguel’s target to reap the first full-year benefits of diversification into the power business starting 2011.
The controlling interests in the three power plants were held by Global 5000 through subsidiary Global 5000 Power Holdings Inc., the entity acquired by San Miguel.
“San Miguel has been officially transformed into a power company,” an analyst said.
San Miguel, through subsidiary San Miguel Energy Corp., used to own only a 40-percent stake in the three power plants.
Global 5000 Investment, which first grabbed the limelight in late 2008 when it bought into Manila Electric Co. as a voting ally of San Miguel, is led by businessmen Iñigo Zobel, former Trade Minister Roberto Ongpin and condiments king Joselito Campos—also the key players behind Top Frontier Holdings Inc., the dominant voting bloc in San Miguel.
During the briefing, San Miguel officials pointed out that while the conglomerate would take over a controlling stake in the Global 5000-led power plants, it would not take a 100-percent interest in them.
But it was disclosed to analysts that Zobel, Ongpin and Campos were willing to divest their remaining minority interest in the three power plants in favor of San Miguel in the future.
When it joined the state bidding for the privatization of the independent power producer (IPP) contracts to operate the three power plants, San Miguel ceded in favor of Global 5000 the 60-percent control of the 345-megawatt San Roque multipurpose hydroelectric plant in Pangasinan, the 1,000-MW coal-fired Sual plant and the 620-MW Limay combined cycle power plant.
Prior to the consolidation, San Miguel already controlled a controlling stake in a fourth power plant, the Limay facility in Bataan.
San Miguel’s four power plants—Sual, Limay, San Roque and Ilijan—generated an estimated 7.4 million megawatt-hours from January to September, registering total revenues of P45.2 billion while operating income reached P5.73 billion.
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