Meralco PowerGen Corp., a unit of Manila Electric Co., completed the acquisition of an 86-percent stake in Global Business Power Corp. from Metro Pacific Investments Corp. and JG Summit Holdings Inc. for P32.86 billion, net of dividends and interest costs.
The purchase, originally announced at a value of P34.466 billion, was completed at the end of March. MGen now owns 100 percent of GBPC.
“Now that we have fully owned GBPC, the first step is to actually functionally integrate two companies and come up with one functional organization for our enlarged power generation. And that would mean we have to streamline our pipeline of projects so that it becomes a more coherent and more focused pipeline,” Meralco president Ray Espinosa said.
GBPC is the largest independent power producer in the Visayas with a portfolio of 1,091 megawatts from coal and diesel plants.
These include GBPC’s 50-percent interest in Alsons Thermal Energy Corp., which in turn owns 75 percent of the new 210-MW coal plant in Maasim, Sarangani. GBPC posted a net income of P386 million in the first quarter.
Meralco and MGen drew a five-year term loan amounting to P5 billion and a P17-billion bridge loan, respectively, to cover the first installment of the GBPC purchase price of P19.6 billion paid out on March 31. The balance of the installments is payable up to September 2022.
Meralco earlier said Meralco PowerGen engaged the services of an independent third party to provide a fairness opinion on the terms of the transaction.
“Based on such independent review, the fairness opinion concluded that the price for the transaction is fair and reasonable from a financial standpoint,” Meralco said.
Meralco PowerGen signed agreements with Beacon Powergen Holding Inc., a wholly-owned subsidiary of Metro Pacific Investments Corp. and JG Summit Holdings Inc. last year to transfer their respective shareholdings in GBPC to Meralco PowerGen for P22.443 billion and P12.023 billion, respectively.
The purchase price would be paid in installments: 60 percent at closing, 20 percent six months after and the remaining 20 percent after 18 months.
“The amount was the result of the negotiations between the sellers and the buyer,” Meralco said.