MVP, Ty firm up partnership in power sector

Business Mirror

23 Oct 2013 

 

Written by Lenie Lectura

THE groups of George Ty and Manuel V. Pangilinan have firmed up their partnership in the power sector through a shareholders’ agreement sealed between First Metro Investment Corp. (First Metro) and Meralco PowerGen Corp. (MGen).

First Metro is the investment banking subsidiary of the Metropolitan Bank and Trust Co. (Metrobank), while MGen is a wholly owned subsidiary and the power-generation arm of the Manila Electric Co. (Meralco).

Under the agreement, First Metro sold its 20-percent stake in Global Business Power Corp. (Global Power) to MGen for P7.15 billion. The sale comes after the recently concluded purchase by Orix Corp. of Japan of 20 percent of Global Power on June 27, which was also valued at P7.15 billion.

After the sale, Global Power will still be majority owned by GT Capital at 50.89 percent; 20 percent by Orix; 20 percent by MGen; and 9.11-percent owned by First Metro.

GT Capital Holdings Inc. is the listed investment holding company of the Ty family, the component businesses of which include Global Power, Metrobank, Toyota Motor Philippines, Federal Land Inc. Philippine AXA Life Insurance Corp. and Charter Ping An Insurance Corp.

“The completion of the deal seals a strategic alliance that will combine the resources and expertise of both MGen and Global Power to respond to the growing need of ensuring a stable supply of reliable and cost-competitive power for the country, particularly the Visayas and Mindanao,” MGen President Oscar S. Reyes said.

Early this year, MGen and Global Power signed a memorandum of understanding to pursue selected power-generation projects in Mindanao.

Global Power Chairman Francisco C. Sebastian, meanwhile, welcomed Meralco as its strategic partner. “Having completed 10 years of operations, Global Power emerges into a new world of opportunities as it broadens and deepens its commitment in the power sector.

We are privileged to have Meralco as a strategic partner, not just for its heft and financial muscle, but for our shared vision of empowering the economic progress of our country, and the uplifting, through light and power, of the lives of our countrymen. Let it be said that with this partnership, the Metrobank Group and Meralco have joined hands, and forces, to do even greater good and fulfill their role in the power industry that is very critical to the future of the Philippines and its people.”

Global Power is one of the largest independent power producers in the Visayas. It currently owns and operates nine power plants with a total installed capacity of 627 megawatts (MW). From a 230-MW mainly bunker fuel capacity in 2006, the company has completed a 410-MW expansion program for its plants, utilizing clean coal-fired technology. The expanded plants commenced commercial operations in 2011. Two expansion projects are onstream: an 82-MW plant in Toledo City and a 150-MW expansion in Panay.

Global Power’s major plants are in Toledo City in Cebu and in Iloilo City in Panay Island, supplying power to private utility companies, such as Visayan Electric Co. and Panay Electric Co., export and industrial zones in Mactan and Balamban, mining and industrial companies like Carmen Copper Corp. and Philippine Phosphate Fertilizer Corp., as well as electric cooperatives in most Visayan islands.

MGen plans to develop a diversified power portfolio of up to 2,700 MW from now until 2020 as part of an overall strategy to ensure that power generation for the Luzon grid, particularly the Meralco franchise area, is sustainable, efficient and highly cost-competitive for the benefit of its customers.   source