Meralco PowerGen Corporation acquires 86% stake in Global Business Power Corporation from Metro Pacific Investments Corporation
and JG Summit Holdings, Inc.
MANILA, Philippines, 23 December 2020 – Metro Pacific Investments Corporation (“MPIC” or the “Company”) (PSE: MPI) and JG Summit Holdings, Inc.(“JG Summit”) today announced the signing of agreements with Meralco PowerGen Corporation (“MGen”), a wholly-owned generation subsidiary of Manila Electric Company (“Meralco”), to transfer their respective shareholdings in Global Business Power Corporation (“GBP”) to MGen.
MPIC, through a subsidiary, holds a 56% ownership interest in GBP while JG Summit holds a 30% interest. MGen currently owns the remaining 14%. As a result of the transaction, MGen will own 100% of GBP.
The transaction is part of the two conglomerate groups’ direction to consolidate their power sector investments into a single vehicle.
GBP is the leading power producer outside Luzon with a gross capacity of 1,091 MW. The company has assets in the Visayas and Mindanao. The transfer is expected to deliver scale and operational synergy to both GBP and MGen.
“This combination is a strategic one for MPIC as it presents opportunities in terms of promoting scale and operational efficiency while at the same time streamlining capital for MPIC’s other growth areas. 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 the COVID-19”, said MPIC President and CEO Jose Ma. K. Lim.
“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”, said Meralco President Atty. Ray C. Espinosa.
“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. MGen is a wholly-owned subsidiary of Manila Electric Company (“Meralco”), where MPIC holds an effective 45.46% interest while JG Summit holds a 29.56% interest. The transaction is subject to customary closing conditions, including regulatory and third-party approvals and is expected to close within the first quarter of 2021, barring any unforeseen circumstances. Macquarie Capital served as financial advisor to MPIC and SyCip Law acted as legal advisor. Alpha Primus Advisors acted as financial advisor to MGen with Picazo Law as its legal advisor.
