First Pacific and Meralco buy into Singapore power project

Business Mirror

Published on Tuesday, 05 March 2013 19:43

Written by InterAksyon.com

THE group of Manuel V. Pangilinan announced on Tuesday that First Pacific Co. Lt. and the Manila Electric Co. (Meralco) are taking in a majority stake in a power project in Singapore. 

“Meralco, together with First Pacific, through the former’s wholly owned subsidiary, Meralco PowerGen Corp. [MPG], will take a majority 70-percent interest in a Singapore power project using a joint-venture company formed for this purpose,” the utility firm said. 

FPM Power Holdings Ltd. (FPMP) will be the corporate vehicle to secure the business interest of the joint venture. Under which, First Pacific, through FP Power Assets Ltd. (FPPA), a wholly owned subsidiary, and MPG will each subscribe to and pay for shares of FPMP, under a 60-40 equity sharing, respectively. 

FPMP, meanwhile, has signed a share purchase agreement with GMR Infrastructure (Singapore) Pte. Ltd. and GMR Infrastructure Ltd. for the acquisition of the majority shares of GMR Energy. 

FPMP will pay $488 million and some adjustments for time value after March 31 for the 70-percent stake it will acquire in GMR Energy. The remaining 30 percent in GMR Energy is owned by Petronas of Malaysia. 

GMR Energy is in the advanced stage of construction of a two 400-megawatt liquefied natural gas combined cycle combustion turbine power plant in Jurong Island, Singapore.

“A further equity contribution into the project is envisaged, amounting to about S$60.0 million, approximately $49.0 million,” added Meralco.

The deal is expected to be closed in the next 30 days.    

Pangilinan, Meralco chairman, said the utility firm’s investment shall be income-accretive to Meralco and to the Philippine economy as well. “MPG’s participation in the joint venture is an expression of Meralco’s long-term vision to be a regional player in the power industry.  The investment represents a major opportunity in an attractive and stable economy.  In addition, the joint venture is expected to provide LNG combined cycle power plant technology transfer to our country,” he said. 

Funding will be sourced from a combination of equity funds and existing credit facilities.

Meralco President Oscar Reyes, the expected commercial operations of the power plant in Singapore is December of this year. The offtake of the plant shall be a combination of vesting contracts with the SP Power Assets Ltd., retail market contracts and merchant supply operations.   source