Meralco buys Subic plant

Manila Standard Today

by Jeremiah F. de Guzman

Manila Electric Co., the country’s biggest electricity distributor, will acquire a controlling stake in a 600-megawatt coal-fired plant project in the Subic Bay Freeport Zone.

Meralco told the Stock Exchange Monday its wholly-owned subsidiary Meralco PowerGen Corp. would take a majority interest in Redondo Peninsula Energy Inc., which is owned by Aboitiz unit Therma Power Inc. and Taiwan Cogeneration Corp. After Meralco’s investment, the other two shareholders in Redondo Peninsula will be diluted equally to have a combined stake of less than 50 percent.

The investment “will help augment generation capacity in the Luzon grid, and add to Meralco’s competitive electricity supply portfolio,” the company said in a disclosure.

Redondo Peninsula, a 50-50 joint venture between Thermal Power and Taiwan Cogeneration, has the development rights and assets to the power plant.

“It is envisaged that the Meralco Group will have a majority ownership interest in RP Energy while Aboitiz Power and Taiwan Cogeneration will be diluted equally and have a combined holding of less than 50 percent,” Meralco said in a statement.

Commercial operation of the proposed Subic Bay coal-fired power plant is scheduled in 2014. Aboitiz Power earlier said it would raise about P34 billion to finance the Subic project.

Meralco, in a separate disclosure, said it would sell P5 billion worth of seven- and 10-year notes. It said it would use the proceeds to fund its capital spending.

The seven-year and 10-year notes were fixed at a yield of 6.2692 percent and 6.89 percent, respectively. The issue was 2.35 times oversubscribed from the planned size of P3 billion, the company said.

Orders reached P7.05 billion, enabling Meralco to exercise its oversubscription option of P2 billion.

Hongkong & Shanghai Banking Corp. Ltd. arranged the notes which will be issued on June 29, it said.

Meralco distributes electricity to 31 cities and 80 municipalities, including Metro Manila, Bulacan, Rizal and Cavite. It also has customers in parts of Laguna, Quezon, Batangas and Pampanga.

Meralco earlier said it was in talks with Semirara Mining Corp., the largest coal producer, for a possible power-generation investment.