CONGLOMERATE San Miguel Corp. (SMC) has obtained regulatory approval to create a new power subsidiary in line with its move away from its traditional foods and drinks businesses.
The Securities and Exchange Commission has allowed the incorporation of San Miguel Electric Corp., which has an authorized capital of P1 billion, a quarter of which has been subscribed to by SMC.
“The primary purpose of this corporation is to carry on the business of producing and generating electricity and processing alternative fuels for power generation,” according to the company’s incorporation papers.
The company will also handle the “operation and energy supply base and the generation and cogeneration of electric power, as well as the supply and consolidation of the electric power demand of end users.”
SMC officials were not immediately available for comment on which of the company’s assets will be folded under San Miguel Electric.
At present, SMC owns a direct 27-percent stake in Manila Electric Co., the country’s largest power distributor, which is also taking steps to enter the power generation sector.
SMC owns four power plants in Sual, Limay, San Roque and Ilijan with a total capacity of about 3,000 megawatts.
In a previous interview, SMC president Ramon S. Ang said the company may take its power unit public, either through an initial share sale or a backdoor listing, depending on which route will prove “faster.”
The company also plans to consolidate this year its oil refining unit Petron Corp. with its power assets.
SMC expects to invest $4 billion over the next five years as part of a plan to double revenues to about P1 trillion.
Part of its buying spree will be supported by the sale of up to 1 billion primary and secondary shares which could raise a maximum of P250 billion for SMC.
The company, however, has postponed the planned equity offering originally set in the first quarter of the year to either April or May in view of the volatile conditions in the stock market.
Since announcing an aggressive diversification strategy three years ago, SMC has made investments in power, toll roads, railways, airports, telecommunications, oil refining and mining. Its shares closed flat at P177.50 each on Friday.
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