MANILA ELECTRIC CO. (Meralco) is weighing its next steps after San Miguel Global Power Holdings Corp. (SMGP) acquired shares in the corporate in consequence of a long-delayed deal.
“That was discussed earlier on the board. No decision yet. We’re just the choices. It really is determined by what San Miguel’s responses are,” Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan told reporters on Monday.
A matter was raised as as to whether Meralco is open to acquiring the 43.23 million shares — similar to a 3.9% stake — that SMGP bought from state-run Land Bank of the Philippines (LANDBANK) at P90 per share.
In 2008, SMGP — then often called Global 500 Investment — entered right into a share purchase agreement with LANDBANK involving Meralco shares. The state-run lender later rescinded the deal, prompting SMGP to sue for damages, arguing that the cancellation was unjustified. In November 2022, the Court of Appeals sided with SMGP, ruling that the bank’s decision to withdraw from the agreement had no factual basis.
While no decision has been made yet, Mr. Pangilinan said that SMGP is “welcome to develop into shareholder.”
Because the country’s largest private distribution utility, Meralco serves over eight million customers across Metro Manila and nearby areas.
In keeping with its efforts to expand and improve electricity service in underserved regions, Meralco last yr submitted an unsolicited proposal for a three way partnership with Batangas Electric Cooperative II (Batelec II), following calls for more stable and reliable power in Batangas province.
Ariel Paciano D. Casanova, Meralco’s senior vice-president for external and government affairs, said the corporate is now looking for clarification from Batelec II on the method for competitive selection.
“We ask them how are they going to treat our unsolicited proposal? How will the choice be done? Will our unsolicited proposal be respected after which will they’ve it challenged? Or will they give you an open bidding for selection? So those are the queries,” he said.
He said that the proposed three way partnership would involve converting the electrical cooperative right into a stock corporation, to be supported through capital infusion by acquiring shares in the brand new entity.
Under the Electric Power Industry Reform Act, electric cooperatives are allowed to convert into either a stock cooperative or a stock corporation.
“We would like to have a greater, wider participation in the electrical cooperative,” Mr. Casanova said. “So principally we’re empowering the electrical cooperative by infusing capital and technology into our technical capability.”
Meralco’s majority shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of the PLDT Useful Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera