Lopez group retains minimal stake in Meralco, expects payoff soon

Manila Times.net

THE Lopez group plans to keep its remaining shares in Manila Electric Co. (Meralco).

Federico Lopez, First Philippine Holdings Corp. (FPHC) chairman, said the group will maintain its 6.6 percent stake in the country’s biggest electricity distributor.

“As far as we’re concerned, we’re hanging on to that and maintain our one seat in the Meralco board,” Lopez said.

FPHC is the holding company for the Lopez group’s power assets, which include Meralco and First Gen Corp.

Meralco distributes electricity to Metro Manila and its environs, which account for over half of the country’s entire economic output. FPHC used to control Meralco but sold the bulk of its shares to the Philippine Long Distance Co. group in an attempt to keep its foothold in the company and secure its acquisition of Energy Development Corp.

The Lopezes sold 60 percent of Meralco, reducing FPHC’s stake in the power utility firm to 13.4 percent from 33.4 percent previously. It eventually sold more shares leaving it with a 6.6 percent stake in Meralco.

Lopez said the group believes it was the right decision to take.

“The profitability of that whether it’s from dividends or even the market value of those shares have gone up much higher even than when we were holding 33.4 percent. That attests to the correct decision that we made to have done that,” he said.

On Tuesday, Meralco shares closed at P251.0 apiece, up from their previous close of P247.2.

Lopez, who also chairs First Gen, said their decision to focus on power generation would also be validated by Meralco as they expect the new controlling block to “respect” existing contracts with First Gen.

“Sometimes, I guess, to get ahead you have to somehow go take a few steps back. And in that sense, that’s what happened with us with Meralco. We also had to change our perspective and even the portfolio of businesses when you look at it from what it used to be, which is basically a lot of companies based on regulated franchises―toll road, Meralco. We’re now moving in to businesses that are very competitive, where you really have to stand on your own merits and if you’re not competitive you lose some of business,” he added.EUAN PAULO C. AÑONUEVO