Gov’t eyes financial advisor for sale of Meralco stake

The National Government (NG) will likely tap a financial advisor to handle the sale of its 29-percent stake in Manila Electric Co. (Meralco), the country’s largest power utility firm.

“We might need to get an advisor for that,” Finance Secretary Margarito Teves said.

Teves said they are sticking with the plan to sell the shares of NG and other government financial institutions (GFIs) and government-owned and controlled corporations in Meralco through a block or strategic sale.

“Our preference is to proceed with the sale within the year anytime within third or fourth quarter. It would be more lucrative for the government to do a strategic sale,” he said.

Teves, however, admitted that the current credit crunch may pose a threat to the planned sale of the Meralco stake.

“This may always serve as a threat. But things are not permanent. Besides, the sale we are talking about will not happen in the next two to three weeks but within the next three months. Things may be different by then. I’m sure we can work things out,” he said.

Government is hoping to raise about P5 billion from the sale of its stake in Meralco, which will be used to balance the budget.

Teves admitted that there are several interested parties in the Meralco sale “but we cannot disclose them yet.”

So far, the Lopez Group has been very vocal in its intention to purchase government’s 29-percent stake.

The Lopez Group and First Philippine Holdings Corp. owns about 17 percent of Meralco while Union Fenosa, Spain’s gas and electricity company, holds roughly nine percent.

Union Fenosa’s stake in Meralco was recently sold to FPHC, bringing the Lopez Group’s stake to 26 percent. The remaining shares are being held by the public and other investors.

FPHC earlier agreed to purchase another 6.6 percent stake in Meralco from the Meralco Pension Fund for P8.3 billion.

To further solidify its bid for government’s stake in Meralco, FPHC recently obtained a $100-million loan from Banco de Oro-EPCI Inc.

The company is seeking to raise as much as $350 million to fund its bid to increase its stake in the power distributor.