GFIs to reinvest Meralco stake sale proceeds
Iris C. Gonzales
Philippine Star
Major government financial institutions (GFIs) intend to reinvest the proceeds from the planned sale of their stake in Manila Electric Co. (Meralco) in other stocks, particularly in the geothermal sector, and to fund priority loans, top officials said.
Land Bank of the Philippines, Social Security System (SSS) and the Development Bank of the Philippines (DBP) are coordinating to sell their stakes in Meralco at roughly P90 per share or equal to the price that another GFI, Government Service Insurance System (GSIS), got when it sold its 27 percent stake in the power utility firm.
“We (Landbank, SSS and DBP) are coordinating with each other. What we want is same if not better than what GSIS got. There is an opportunity for us to cash in for profit taking so it’s the right time for us to probably take it,” said Landbank treasurer Reevie Vergara.
Asked who the potential buyer is, Vergara said they are still finalizing the transaction but he said the buyer is likely to be “just one corporate entity.” He said the financial institutions are aiming to close the transaction by yearend.
Another Landbank official said the institution is looking at reinvesting the proceeds of the sale in other stocks.
“It could be EDC Energy Development Corp.) and Manila Water,” the official said.
EDC, controlled by the Lopez Group’s First Gen Corp., is the country’s largest geothermal company. Manila Water, the water distribution firm holding the concession in the east zone of Metro Manila, is owned by the Ayala family.
However, Vergara said Landbank’s priority is to use the proceeds of the planned sale to fund its loans to the agriculture sector.
“We might go into loans. Our priority is small and medium enterprises and agricultural coops,” he said.
SSS president and chief executive officer Romulo Neri, for his part, said the state pension fund decided to sell its stake in Meralco because it got a good price.
“We will make a good profit,” he noted.
Neri said SSS would be using the proceeds to reinvest in other portfolios.
Last October, GSIS sold its remaining 27 percent stake in Meralco to food and beverage conglomerate San Miguel Corp. GSIS expected to raise P30 billion from the transaction.
Early this year, GSIS spent P8.9 billion to acquire the government’s remaining 9.9 percent in Meralco. This raised the pension fund manager’s stake in Meralco to about 27 percent.
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