Meralco PowerGen Corporation (MGen), the power generation arm of the Manila Electric Company (MERALCO), the country’s largest power distributor has taken full ownership of Global Business Power Corporation (GBP), the largest power generator outside Luzon.
In a disclosure to the Philippine Stock Exchange, MERALCO said that MGen, which owns 14% of GBP, will be buying out Metro Pacific Investments Corporation (MPIC) and JG Summit Holdings. MPIC, through subsidiary Beacon Powergen Holding, Inc., owns 56% of GBP while JG Summit owns the remaining 30%.
The transaction, which is still subject to approval by regulatory agencies, will cost a total of Php34.5 billion. Php22.4 billion represents MPIC’s stake, while Php12 billion represents JG Summit’s.
GBP, which operates in Visayas, Mindanao, and Mindoro, has power generation plants with a capacity of 1,091 megawatts (MW). Its facilities include the clean coal-powered 150MW Panay Power Station in Iloilo City (photo above).
“The transfer is expected to deliver scale and operational synergy to both GBP and [MGen] and further enable these companies to provide ample and reliable supply of power to distribution utilities, electric cooperatives and other customers at competitive rates,” the disclosure read.
Business tycoon Manny V. Pangilinan sits as chairman of MPIC, MERALCO, and GBP.
“With GBP’s operational experience of successfully running its own portfolio of generation assets, coupled with MGen’s own record of managing the first supercritical generation plant in the country, MGen will be better placed to focus on its plan to build its own generation portfolio, including an ambition to own at least 1 GW in renewable energy capacity in five years,” MERALCO President Atty. Ray Espinosa said in a statement.
In a separate statement, JG Summit said that the transaction with MPIC is part of the two conglomerate groups’ direction to consolidate their power sector investments into a single vehicle.
“We are happy with how GBP has performed since our investment in 2016. The challenge now is how to further grow the business and take it to the next level. I am confident that combining this under Meralco where JG Summit is also a significant shareholder is the best way to achieve synergies and create further value,” said JG Summit President and CEO Lance Gokongwei.
“Each of the two parties has complementary strengths and thus together can create a solid and unique platform for strategic growth. The combined group will be in a strong position to respond to the needs of the country as the economy makes a strong rebound in 2021, with the now brighter prospect of available vaccines against [COVID-19],” said MPIC President and CEO Jose Ma. K. Lim.
