Metro Pacific Investments Corp. said on Friday it formed a strategic alliance with the holding company of tycoon George Ty by swapping shares and acquiring a majority stake of the latter’s power generation unit.
The infrastructure unit of First Pacific Co. Ltd. said its associate, Beacon Electric Asset Holdings Inc., through wholly-owned subsidiary Beacon PowerGen Holdings Inc., signed an agreement with GT Capital Holdings Inc. to acquire 56 percent of Global Business Power Corp. for P22.6 billion.
Metro Pacific said the transaction would be settled through the payment of 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.
After the transaction, GT Capital shares in Global Business would be reduced to 22 percent and which those of Manila Electric Co. would be trimmed to 22 percent.
Metro Pacific also said 3.6 billion in new common shares were placed in GT Capital at a price of P6.10 apiece 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.
“I am delighted to announce this new alliance with the GT Capital Group. This investment has strengthened MPIC’s finances and together we will work to accelerate our investment in, and development of, the infrastructure of our country,” MPIC chairman Manuel Pangilinan said.
Pangilinan said the investment in Global Power was part of the company’s drive to accelerate the pace of overall participation in the power generation sector, while allowing Meralco to focus on servicing its Luzon customers.
Global Power is the leading power supplier in Visayas with an aggregate 852 megawatt of coal- and diesel-powered generating capacity, including 150 MW that will start operations later this year, and 670 MW for further expansion.
The main development project is a 670-MW coal-fired plant in La Union, Pangasinan.
GT Capital vice chairman Alfred Ty said the company would become a strategic investor of MPIC, which is into power, water, toll roads, railways and healthcare.
“This is a significant milestone for GT Capital since it expands and strengthens our core sector coverage with an infrastructure platform ensuring sustainable growth,” Ty said.
MPIC president and chief executive Jose Ma. Lim, said the company was positive about deepening its investment in the power sector in the Philippines.
“Although there may be some near-term modest capacity surplus, it is clear that our low per capita power consumption and continuing rapid economic growth combine to mean the outlook for the sector is positive in the medium to long term,” Lim said.