Meralco to raise stake in Global Business Power

MANILA, Philippines – Meralco PowerGen Corporation, the power generation arm of power distributor Manila Electric Company (Meralco), is increasing its stake in Global Business Power Corporation (GBPC) of the Metrobank Group to 22%.

“In the Meralco Board of Directors meeting earlier this morning, the Board approved the funding for Meralco Powergen’s acquisition of another 2% stake in Global Business Power, which will raise Meralco PowerGen’s equity interest in GBPC to 22%,” said Meralco president Oscar Reyes.

Meralco PowerGen bought last year 20% of GBPC, the largest independent power producer in the Visayas, for P7.15 billion.

Meralco officials said the additional stake would be acquired from First Metro Investment Corporation, but did not say for how much.

“It will be closed in June. First Metro divested 4%,” said Meralco chairman Manuel Pangilinan. The other 2% was allocated for ORIX Corporation.

Pangilinan said Meralco PowerGen was willing to increase its interest in GBPC to up to 50% should other shareholders divest. “Well, there’s no formal agreement with other shareholders but should other shareholders sell, we will be open to invest.”

“It’s a good business and the Metrobank Group has managed it well.”

Meralco PowerGen is developing a diversified power portfolio of up to 2,500 megawatts (MW) from now until 2020. The company has taken a majority stake in Redondo Peninsula Energy Inc., which is developing a 600-megawatt coal project in Subic.

Meralco, through its power unit, is putting up power projects as part of an overall strategy to ensure that power generation is sustainable, efficient and maximized especially given growing concerns about the sufficiency of power supply in the coming years.

GBPC, through its subsidiary Panay Energy Development Corporation, for its part, will increase its power generation capacity in the Visayas to 328 MW from the existing 164 MW by 2015. It currently has a total capacity of 633 megawatts in the Visayas and it is looking at expanding to Mindanao where power is needed.

It also owns a 92-MW diesel-fired power plant in La Paz that is being operated by Panay Power Corporation.

Other power plants of GBPC are located in Cebu, Aklan and Oriental Mindoro.

GBPC is a member of the GT Capital Group of Companies, of which Metrobank is the leading company. – Rappler.com