MVP Group not keen on buying additional shares in Meralco

Business Mirror

Published on Monday, 29 July 2013 19:15

Written by Lenie Lectura

MANILA Electric Co. (Meralco) Chairman Manuel V. Pangilinan said Beacon Electric Asset Holdings Inc. is not interested to buy additional Meralco shares after it recently acquired 10 million shares of stock at P270 each.

Beacon is owned by Metro Pacific Investment Corp. and Philippine Long Distance Telephone Co., both of which are headed by Pangilinan. Beacon was formed to hold shares in the country’s largest power distribution firm. It now owns less than 50 percent of the outstanding capital stock of Meralco.

“Not at the moment. Not for now because there’s a threshold limit as to trigger a general offer. We don’t want to do that. We believe Meralco should stay as a public utility,” said Pangilinan.

Pangilinan said it’s not clear whether a 50-percent or 51-percent ownership of the firm triggers a mandatory  tender offer. “There are various interpretations as to what triggers the general offer. We don’t want to test the regulatory waters, we might drown.”

Beacon was one of the buyers of the 63,333,330 Meralco common shares that San Miguel Corp. sold earlier to Pangilinan’s group and to the Government Service Insurance System.

Meanwhile, Meralco is poised to hit its P17-billion core profit guidance this year after it reported on Monday a P9.2-billion core income for the first half of the year.

“We will continue to build upon our accomplishments and momentum. Given our first half results and the positive outlook for the second half of the year, we are prepared to guide our full year 2013 consolidated core net income at P17 billion,” said Pangilinan.

Meralco’s core profit at end-June this year was 2-percent higher than the P9 billion posted in the same period last year.  However, the reported net income declined by 3 percent to P9.4 billion for the first six months of the year, without the P770-million one-time gain from the sale of Rockwell Land shares in 2012.

“Our reported net income remains strong but slightly lower because we recognized a gain from our divestment of Rockwell Land shares last year and other taxes totaling P1.6 billion net of tax. Without tax, that’s more than P770 million, said Meralco Chief Finance Officer Betty Sy-Yap.

Meralco’s 2012 core profit stood at P16.3 billion.  President Oscar Reyes said the company is confident it will attain the core profit guidance this year.             

“The third quarter and fourth quarter will be closer to the first-quarter core income,” he said.

Revenues stood at P141.7 billion at end-June this year from P143.6 billion. Distribution revenues, which accounted for only 18 percent of the customer bill, reflected the effect of the higher power sales volume, which grew by 4 percent to 16,863 gigawatt-hours.

Total costs and expenses during the period rose declined by P129 billion. Capital expenditure (capex) reached P3.7 billion at the end of June.

In June Standard & Poor’s upgraded Meralco’s credit rating to BB with a stable outlook on account of strong demand and a relatively stable regulatory environment.  The rating also reflects S&P’s expectation of a steady regulatory regime supporting continuing strong sales and prudent capex.   source