SMC power arm plans IPO by year-end

business mirror

SUNDAY, 14 AUGUST 2011 20:31 PAUL ANTHONY A. ISLA

CONGLOMERATE San Miguel Corp. (SMC) said on Friday it would proceed with the initial public offering (IPO) of its power business before the end of the year.

In a disclosure to the Philippine Stock Exchange (PSE), SMC said the board of directors of SMC Global Power Holdings Corp., its power business arm, has approved on August 12, the reorganization of the power business, and increase its authorized capital stock.

SMC Global earlier said it plans to raise $500 million through the IPO to help fund purchases of power plants and production contracts the government is selling to pay off debts.

In July last year, the Department of Energy recognized that the SMC Global has the largest power capacity portfolio accounting for 28.1 percent of the Luzon grid and 21.4 percent of the national grid.

SMC Global’s portfolio includes the 620-megawatt (MW) Limay combined cycle power plant. It also manages the contracted capacities of the 1,000-MW Sual coal-fired power plant, 345-MW San Roque multipurpose hydro plant and the 1,200-MW Ilijan natural gas power plant.

In another development, SMC said its board has also approved the sale to San Miguel Pure Foods Co. Inc. of 59.09 million shares of stock of the Manila Electric Co. (Meralco) at P220 per share.

SMC said the purchase price of the shares is based on the average trading price of Meralco from January to July this year with a discount of 12 percent. The shares sold by the company to San Miguel Pure Foods formed part of the shares bought from the Government Service Insurance System (GSIS).

SMC said it has fully paid the purchase price of these shares to GSIS and have been crossed in the PSE on August 5 this year.

Last week the local bourse reported that about 300.9 million shares of Meralco were traded for P27 billion. The PSE report showed that the block sale of Meralco shares were traded at only P90 per share at several transactions.