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THE
Lopez family would definitely bid for the entire
29-percent stake of the government in the country’s
largest power utility Manila Electric Co. (Meralco). The
equity is up for sale in the next quarter.
“Whatever is put on the auction block, whether it is the
stake of the Republic of the Philippines or the
government financial institutions, certainly we will be
bidding for it,” said Meralco chairman and chief
executive Manuel M. Lopez in an interview Tuesday.
The
Lopez group currently holds around 30 percent equity in
Meralco. Should it succeed in acquiring the state-owned
shares, the group would effectively control the power
distribution concern.
The
government shares in Meralco number around 290 million
shares. Meralco shares closed up P1 to P92.50 apiece
Tuesday.
“We are
ready for it,” said Lopez, adding that the group will
most likely form strategic partnerships with companies
as well as infuse equity and take out loans to raise the
fund for the acquisition.
He said
their group has started exploratory talks with potential
partners but have yet to finalize any agreement. A
possible strategic partner could be First Philippine
Holdings Corp., Lopez added.
Government officials earlier said several foreign and
local groups were keen on acquiring a stake in Meralco.
The power utility has a market capitalization of P54.76
billion.
At the
end of the first quarter, Meralco’s net profit amounted
to P532 million, a turnaround from a loss of P748
million a year earlier. Provision for probable losses
was stopped starting January 2007 with the favorable
Supreme Court decision on the unbundling rate case last
December.
Had
there been no provisions made for probable losses
amounting to P1.43 billion in the first quarter of 2006,
net income for that period would have been P179 million.
Compared to that level, net income this year would still
be higher by 197 percent.
The 3.7
percent rise in energy sales from January to March this
year also contributed to the growth in bottom line as
well as the 49.1 percent decrease in unrecoverable
purchased power to P494.46 million.
On the
robust electricity volume growth of 3.7 percent,
revenues for the period grew 15.8 percent from P41.61
billion last year to P48.20 billion this year.
In
another development, Lopez said Meralco management is
pushing for the redevelopment of parts of the Meralco
compound in Ortigas to maximize the value creation of
its property assets.
Starting
this year, the compound will be home to The Strip, a
moderately-sized commercial area featuring prominent
retailers. Adjacent to this is the three mid-rise
buildings for lease to business process outsourcing.
By the
end of 2008, locators are expected to move into the
first two of three towers. The compound will also house
residential projects.
As
property owner, Meralco will not spend a single-centavo
on these developments as funding will be shouldered by
partner Rockwell Land Corp., Lopez said. |
