Philippine Long Distance Telephone Co. on Monday revised upward its core income guidance this year after selling some of its stake in Beacon Electric Assets Holdings.
“We are prepared to revise our core income for 2016 to P30 billion from P28 billion [because] there will be some gains from Beacon transactions,” PLDT chairman Manuel Pangilinan told reporters Monday.
PLDT Communications and Energy Ventures Inc. and Metro Pacific Investments Corp. on Monday signed a sales purchase agreement for the latter to acquire a further 25 percent stake in Beacon for P26.2 billion.
Beacon owns 35 percent of Manila Electric Co. and 56 percent of Global Business Power Corp., a unit of GT Capital Holdings Inc. of tycoon Geroge Ty.
The purchase will be settled in a cash payment of P17 billion, with the balance of P9 billion to be paid over the next four years.
Upon completion of the purchase, MPIC will continue to own a direct 15 percent interest in Meralco and through its 75-percent interest in Beacon, a further 26 percent, thereby taking its effective ownership interest in Meralco to 41.2 percent and in Global Power to 42 percent directly and about 9.1 percent indirectly through Meralco.
PCEV’s interest in Meralco will be reduced to an effective interest of 8.7 percent.
There will be no change in the aggregate interest of MPIC, PCEV and Beacon in Meralco, which remains at 49.96 percent.
“From a PLDT perspective, my view is that the investment of PLDT in Meralco which we made way back in 2009 has already ripened to the point where it is time for PLDT to consider divesting part and eventually all of its stake in Meralco,” Pangilinan said.
“So clearly, for us to maintain our control in Meralco, it is best at least part of the holdings of PLDT should be sold for the right price to Metro Pacific,” Pangilinan said.
Pangilinan said the proceeds would be used to finance PLDT’s capital expenditure, which is expected to be elevated this year and in the next there years.
The company has programmed P43 billion in capex this year.
MPIC president and chief executive Jose Ma. Lim said the investment represented good value for MPIC in light of the long-term growth outlook of the Philippine power sector.
“You will recall that last year, we substantially reduced the leverage in Beacon. Meralco is now the single largest source of cash generation for MPIC and in undertaking this investment, we have enhanced our overall cash flow and further improved our growth prospects,” Lim said.
Beacon Electric Asset Holdings Inc., through a wholly-owned subsidiary Beacon PowerGen Holdings Inc., on Friday signed a share purchase agreement with GT Capital Holdings Inc. to acquire a total 56 percent of Global Business Power Corp. for P22.6 billion.
Metro Pacific said the transaction would be settled through P11.03 billion in cash on closing and the balance via a vendor financing facility, which will be replaced with long-term bank debt within 90 days from May 27. The cash payment will be funded by a combination of internal resources and bank debt.
Metro Pacific also said a total of 3.6 billion new common shares were placed to GT Capital at a price of P6.10 per share or a total of P21.96 billion. Upon completion of the subscription, GT Capital would hold 11.4 percent of the enlarged common share capital base of MPIC.
In addition, GT Capital will acquire 1.3 billion shares from MPIC’s majority shareholder, Metro Pacific Holdings Inc., bringing its stake in MPIC’s common share capital to 15.6 percent.
Global Power is the leading power supplier in Visayas with 852 MW of coal and diesel powered generating capacity, including 150 MW that will start operations later this year and 670 MW for further expansion.
