By Myrna Velasco
Top management changes are being firmed up to be enforced by the end of this month at the Meralco PowerGen Corporation (MGen), the power generation arm of Manila Electric Company (Meralco), according to highly placed sources.
Jaime T. Azurin, president of Global Business Power Corporation, an affiliate company that was acquired by MGen, would take over as President and CEO of the power investment arm of Meralco; while current MGen President Rogelio L. Singson is poised for an assignment at another infrastructure company of the MVP Group.
The source indicated that the turnover of leadership at MGen is targetted for June 30 this year, but Azurin may start transitioning earlier by mid-June, so he can get his grips on the power firm’s operations before he takes over at the end of the month.
The prospective leadership changeover at MGen came after Meralco and subsidiary MGen completed the acquisition of the shareholdings of affiliate firm Global Business Power on March 31 this year.
To partly fund the merger and acquisition (M&A) deal which was valued at P34.466 billion, Meralco executives previously disclosed that P22 billion worth of loans had been secured from two banks – BDO and the Philippine National Ban (PNB).
As noted, parent firm Meralco tapped P5.0 billion of the required borrowings for the acquisition while MGen secured bigger loan chunk of P17 billion with PNB.
The PNB loan, in particular, according to Meralco, is “a short term loan maturing in April 2021, but extendible for another 2 months, to be followed by a long term loan cover.
Following the completion of the GBPC purchase, Meralco President and CEO Ray C. Espinosa emphasized that “the first step is to re-integrate the two companies and come up with one functional organization for our power generation – and that would mean that we will streamline our pipeline of projects, so that it becomes a more coherent and more focused pipeline.”
Espinosa also previously hinted that there could be changes in management, but he has not specified yet the pace of corporate restructuring that shall be fleshed out in the re-integrated power generation firms.
“On both sides, I would say that the pipeline of MGen is actually quite a lot and very interesting as well as those of GBPC. I think we’re happy that we have a much bigger pipeline of projects, particularly focused on renewables,” Espinosa asserted.
He added “the projects in the pipeline are projects that have been vetted already and will be pursued,” hence, the facet of streamlining, will be “more about hunting for more projects that would have to be sort of synergized between the two companies so we’d have one development outlook.”
As previously disclosed, the stake acquisition by MGen was carried out through the transfer of the shareholdings of Beacon Powergen Holding Inc. (BEAHI), a wholly-owned subsidiary of Metro Pacific Investments Corporation (MPIC); and that of JG Summit Holdings Inc of the Gokongwei group.
The purchase price of the transferred BEAHI shareholdings had been pegged at P22,443,400,000.00 – and that accounted for the 56-percent equity of the MPIC subsidiary in GBP.
For the JG Summit shareholdings, the transaction amounted to P12,023,250,000.00 for the 30-percent ownership of the Gokongwei firm in Global Power.
“As a result of the transaction, MGEN will own 100-percent of GBP,” its parent-firm Meralco has stipulated in its disclosure to the Philippine Stock Exchange in December last year.
It was specified that the purchase price “shall be paid in installments based on the following schedule: 60-percent shall be paid on closing; 20-percent will be paid six (6) months after; and the remaining 20-percent will be paid after 18 months.”