By Jordeene B. Lagare | Manila Times
Meralco PowerGen Corp. (MGen), the power generation unit of Manila Electric Co. (Meralco), acquired 86 percent stake in Global Business Power Corp. (GBP).
MGen signed on Wednesday the signing of share purchase agreements with Beacon Powergen Holding Inc. (BEAHI) and JG Summit Holdings Inc. to transfer their respective shareholdings in GBP.
BEAHI, a wholly-owned subsidiary of Metro Pacific Investments Corp., holds a 56-percent ownership interest in GBP while JG Summit has the remaining 30 percent.
Once the transaction is completed, MGen’s ownership stake in GBP will increase to 100 percent from its current holding of 14 percent.
Under the accord signed by the parties, the Meralco subsidiary shall pay P22.443 billion to BEAHI and P12 billion to JG Summit.
The total amount will be paid in installments: 60 percent to be paid at closing; 20 percent to be settled six months after; and the remaining 20 percent to be given after 18 months.
MPIC said the deal forms part of the two conglomerate groups’ direction to consolidate their power sector investments into a single vehicle.
“The transaction is subject to customary closing conditions, including regulatory and third party approvals and is expected to close within the first quarter of 2021, barring any unforeseen circumstances,” said Meralco in a disclosure.
MPIC tapped Macquarie Capital as financial advisor and SyCip Law as legal advisor.
Alpha Primus Advisors acted as financial advisor to Meralco/MGen with Picazo Law as its legal advisor.
“This combination is a strategic one for MPIC as it presents opportunities in terms of promoting scale and operational efficiency while at the same time streamlining capital for MPIC’s other growth areas. Each of the two parties has complementary strengths and thus together can create a solid and unique platform for strategic growth,” MPIC President and Chief Executive Officer (CEO) Jose Ma. Lim said.
“We are happy with how GBP has performed since our investment in 2016. The challenge now is how to further grow the business and take it to the next level. I am confident that combining this under Meralco where JG Summit is also a significant shareholder is the best way to achieve synergies and create further value,” JG Summit President and CEO Lance Gokongwei said.
GBP is the leading power producer outside Luzon with a gross capacity of 1,091 megawatts. The company has assets in the Visayas and Mindanao.