Two foreign companies have expressed “serious” interest to acquire part of the holdings of PLDT Inc. in Manila Electric Co., which are held by Beacon Electric Assets Holdings Inc.
“The sale of Meralco shares is really being undertaken by PLDT. Selling its 25 percent stake in Beacon. Beacon in turn owns 35 percent, so we are talking about a little over 8 percent attributable interest in Meralco,” Meralco chairman Manuel Pangilinan told reporters.
Pangilinan, who is also chairman of PLDT, said the sale of the shares to the investors might be concluded in the first half of the year.
PLDT has an 8.7 percent interest in Meralco through Beacon, which was valued last year at around “north of P26.2 billion.” Beacon is a special purpose company owned jointly by Metro Pacific Investments Corp. and PLDT Communications and Energy Ventures Inc.
“At the moment I think PLDT is in the process of talking to some of the investors in the sale of their stake at the Beacon level. That’ where it is today, and if there is an agreement reached, we will make an announcement. The discussions are with potential investors that are not group related,” Pangilinan said.
He said the PLDT Group planned to use proceeds of the sale “essentially to reduce debt at the PLDT level” and a portion to pay the balance installment due to San Miguel Corp.
“Because we want to bring back net debt ratio to around two times by year end 2017,” Pangilinan said.
PLDT and rival Globe Telecom Inc. last year jointly acquired 100 percent of San Miguel’s Vega Telecom Inc. for P52.08 billion and assumed P17.02 billion of liabilities.
Meralco president Oscar Reyes confirmed the sale involved a portion of Beacon’s stake in Meralco.
“Definitely it will be sold to an outsider but I’m not to privy,” Reyes said, adding the sale would not have an impact on the company’s plans.
“It will not be sold within the group,” the Meralco official said.
Meralco shares are owned by Beacon, JG Summit Holdings Inc. and Metro Pacific, while some stocks are held by the public.
Pangilinan said in August last year the group was in discussions with a number of interested investors on the sale of Beacon’s shares in PLDT.
Meralco is the country’s biggest power distributor with over six million customers in its franchise area.
The company reported Monday that net income increased 6 percent in the first quarter to P4.8 billion from P4.5 billion a year ago, on higher electricity sales.
Meralco’s core net income was unchanged at P4 billion in the first quarter from a year earlier, as operating and business conditions proved to be challenging period, the company said.
Energy sales in January to March reached 9,317 gigawatt-hours, up 3 percent from 9,077 gWh sold in the same period in 2016.
Meralco’s revenues grew 12 percent in the first quarter to P64.7 billion, while operating expenses stood at P6.2 billion.
Pangilinan said he expected robust spending and household demand to sustain growth this year, supported by overseas remittances and higher government spending.