1. The placing of 3.6 billion new MPIC ordinary common shares to GT Capital Holdings Inc. (PSE: GTCAP) at a price of PhP6.10 per share for a total cash consideration of PhP21.96 billion. This will be received by MPIC as a deposit for share subscription while MPIC increases its Authorized Share Capital pursuant to shareholder approvals received in 2015. Upon completion of the subscription, GT Capital would hold 11.4% of the enlarged common share capital base of MPIC. GT Capital will also acquire a further 1.3 billion shares from Metro Pacific Holdings Inc (MPHI), the majority shareholder of MPIC, which would then increase GT Capital’s overall holding in the common share capital of MPIC to 15.6%. Immediately prior to the issue of new common shares by MPIC as described above, MPHI has subscribed to 4.1 billion newly issued Class A voting preferred shares of MPIC at par value for a total consideration of PhP41.3 million. Following all these transactions, MPHI continues to hold an overall majority of the share capital of MPIC, with a 55% voting interest.
2. MPIC also announced that its associate, Beacon Electric Asset Holdings Inc., through a wholly owned subsidiary Beacon PowerGen Holdings Inc., has entered into a Share Purchase Agreement with GT Capital Holdings to acquire an aggregate 56% of the ordinary and issued share capital of Global Business Power Corp. for an aggregate consideration of PhP22.06 billion. This consideration will be settled as to PhP11.03 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 closing. The cash payment on closing will be funded by a combination of internal resources and bank debt.
Global Power is the leading power supplier in Visayas with an aggregate 852MW of coal and diesel powered generating capacity at present (including 150MW to commence operations later this year) and 670MW for further expansion. The main development project is a 670MW super critical coal fired plant in La Union, Pangasinan (with 600MW EPPA signed with MERALCO). The investment in Global Power will be immediately accretive to the earnings of Beacon Electric.
Commenting on the investment by GT Capital, MPIC Chairman Manuel V. Pangilinan said, “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. The investment in Global Power is part of our drive to accelerate the pace of overall participation in the power generation sector while allowing MERALCO to focus predominantly on development of its ‘One Meralco’ strategy focused on servicing its Luzon customers.”
GT Capital Vice Chairman Alfred V. Ty said, “We are very pleased to announce GT Capital’s Partnership with MPIC, the largest utilities and infrastructure conglomerate in the country. With this investment, GT Capital now becomes the strategic investor of MPIC, a dynamic growth company embedded in the most critical sectors of 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.”
GT Capital Vice Chairman Francisco C. Sebastian also commented, “We are delighted to be part of a prestigious group, and to be able to explore together the country’s growth potential. The GT Capital-MPIC business partnership creates opportunities for synergies. We are excited with the possibilities arising from this alliance.”
Jose Ma. K. Lim, MPIC President and CEO, said, “I would add to Manny’s welcome of the alliance with GT Capital. I feel this will bring strength and investment enhancement to MPIC.”
Turning to Global Power, Lim added, “We are positive about deepening our 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. To this end, the Global Power investment is a strong generation platform, offering both immediately attractive cash returns and real medium term expansion. We are also in active discussion with PLDT to increase our economic interest in Beacon Electric, I hope to have a further announcement regarding Beacon Electric imminently.”