Foreign firms still interested in Meralco buy-in — official

Foreign investors remain interested in acquiring a reasonable stake in the Manila Electric Co. (Meralco) despite adverse political conditions now plaguing the country.

Meralco president and chief executive officer Manuel Lopez said there are companies based in the United Kingdom and the US that are interested in the country’s biggest private electricity distribution company.

"There are several UK and US companies who are still interested but I can not give their names while talks are still ongoing," Lopez told The STAR.

The governments holds a total of 14-percent stake in Meralco distributed as follows: Land Bank of the Philippines (2.9 percent), Asset Privatization Trust (4.8 percent), Social Security System (four percent), Presidential Commission for Good Government (2.3 percent), and Government Service Insurance System (10,000 shares). The whole lot is worth approximately $500 million.

Lopez said the Spanish firm Union Fenosa, one of Meralco’s strategic partners in energy-related industries, has lost interest in acquiring the 14-percent equity. He said Fenosa already controls nine percent of Meralco and is not interested in expanding its stake. However, the Spanish firm remains open to other business prospects.

Fenosa representative Jose Luis Gomez confirmed Lopez’s statement saying that they are contented with their existing stake in Meralco. But they are still open to business prospects with the Lopez conglomerate or other power-related business opportunities in the Philippines. Earlier, they placed a bid for a 40-percent stake in First Power Generation Corp. (FPGC) but failed to make the prospective list.

The series of delays in the disposition of the government stake in Meralco has been the biggest thorn in the company’s expansion plans. Most foreign groups have already stated that they would only undertake new investments in the country’s energy and electricity sector if the rules of the game are clear and binding.

"We do not know what are the government’s plans on the disposition of the shares," Lopez said.

Industry sources said some of the strategic foreign partners of the Lopez conglomerate under First Philippine Holdings Corp. have earlier expressed interest in acquiring the 14 percent government stake. These are National Power Plc of the United Kingdom, Edison Mission Energy of the US, British Gas Plc, and China Electric Co.

Lopez said that they would prefer foreign investors or strategic partners with experience in running or operating utility companies. But that should not stop Meralco from entertaining financial institutions offering portfolio investments in the company.