Manila Electric interested in San Miguel power assets

Manila Bulletin 
By Cecilia Yap (Bloomberg) 
Published: August 9, 2013 
Manila Electric Co. said it’s interested in buying some of San Miguel Corp.’s power plants, to help the electricity retailer’s expansion into power generation.
“If San Miguel is prepared to sell, we’re prepared to take a look at it,” Manila Electric Chairman Manuel Pangilinan said in an interview.
Manila Electric, also known as Meralco, is looking to return to generation after a four-decade hiatus, with plans to supply as much as 30 percent of demand on the Philippines’ main island of Luzon. San Miguel, a shareholder of Meralco, wants to raise about $4 billion by selling power assets to help fund its expansion into industries and infrastructure, President Ramon Ang said in an interview on July 12.
Meralco is particularly interested in San Miguel’s 1,200- megawatt coal-fired Sual power plant and its 345-megawatt San Roque hydroelectric plant, said Pangilinan. Both are in Luzon where the company is based. Meralco serves a quarter of the Philippines’ population in an area that accounts for half of gross domestic product.
San Miguel’s Ang didn’t respond to mobile-phone messages seeking comment.
Meralco shares rose 2 percent to 281.40 pesos, its biggest gain since July 25. San Miguel gained 2.7 percent to 84.35 pesos, after falling in the past five sessions. The benchmark Philippine stock index was unchanged at 6,420.79.
San Miguel last month raised $400 million (P17.37 billion) by selling 54.3 million Meralco shares, leaving the company with a 27 percent stake in the power retailer. A fifth of the shares were purchased by Beacon Electric Asset Holdings Inc., the utility’s major shareholder and also controlled by Pangilinan.
Metro Pacific Investment Corporation chairman Manuel V. Panglinan confirmed that they, participated in the placement. MPIC vice president for communications Melody del Rosario said they acquired 10 million Meralco shares worth P2.7 billion.
MPIC’s latest acquisition is equivalent to 0.88 percent of Meralco. Pangilinan had said earlier that they were interested in acquiring a small amount of Meralco shares so as not to trigger a mandatory tender offer.
Prior to the transaction, MPIC owned a 48.34 percent of Meralco though Beacon Electric Assets Holdings. The tender offer would be triggered once the group gains a majority stake.
The transaction was structured as a placing of shares in the share capital of Meralco. The share sale was completed via a block sale at the PSE yesterday.
Deutsche Bank AG, Hong Kong Branch and Standard Chartered Securities (Singapore) Pte. Limited were the placing agents for the transaction.
Prior to the sale, SMC owned 32.8 percent of Meralco of which 21.46 percent is directly owned while 6.13 percent are held by subsidiary SMC Global Power Holdings Corporation and 5.24 percent owned by San Miguel Pure Foods Company Inc.
SMC president Ramon S. Ang had earlier indicated the firm’s plans to sell its significant stake in Meralco to raise funds for its ongoing diversification plan which involves aggressive expansion into new businesses such as the oil and gas exploration, power generation, infrastructure, and airline industries.( (With report from James A. Loyola)   source