Manila—(PHStocks)—Manila Electric Company (MERALCO, PSE: MER), through its wholly owned subsidiary MERALCO PowerGen Corporation (MPG), has agreed to join First Pacific Company Ltd (FPC) of Hong Kong to take a majority 70% interest together in a Singaporean power project using a joint venture company formed for this purpose.
FPC, through its wholly owned subsidiary FP Power Assets Limited (FPPA), and MPG shall subscribe to and pay for shares of FPM Power Holdings Limited (FPMP) under a 60%-40% equity sharing, respectively. FPMP shall serve as the corporate vehicle to secure the business interest of the joint venture.
FPMP has entered into a share purchase agreement with GMR Infrastructure (Singapore) Pte Ltd and GMR Infrastructure Limited (collectively GMRIL) for the acquisition of the majority shares of GMR Energy (Singapore) Pte Ltd. Under the terms of the SPA, FPMP has agreed, among others, to pay the amount of S$600,006,666.00 ($488 million) plus certain adjustments for time value of money after 31 March 2013 to GMRIL for the latter’s 70% interest in GMR Energy. The remaining 30% ownership in GMR Energy is owned by Petronas of Malaysia, the national oil company. The closing of the transaction is subject to the fulfilment of certain terms and conditions within the next 30 days.
A further equity contribution into the project is envisaged, amounting to about S$60 million ($49 million).
GMR Energy is in the advanced stage of construction of a 2x400MW Liquefied Natural Gas (LNG) Combined Cycle Combustion Turbine Power Plant located in Jurong Island, Singapore. The plant is expected to commence commercial operations in December 2013. The offtake of the plant shall be a combination of vesting contracts with the SP Power Assets Ltd, retail market contracts and merchant supply operations.
MPG shall fund its proportionate share for the acquisition and pro rata equity commitments through existing credit facilities and equity funds.