First Holdings completes buyout of Union Fenosa

First Philippine Holdings Corp. (FPHC), the holding firm for the Lopez family’s power generation and infrastructure businesses, completed yesterday the acquisition of Spanish firm Union Fenosa Internacional S.A.’s ownership in their joint venture company, First Philippine Union Fenosa (FPUF).

With this purchase, FPHC is now the sole owner of FPUF which owns 253.09 million shares or about 22.7 percent of power giant Manila Electric Co. (Meralco). This brings FPHC’s total stake in Meralco to 33.4 percent from a near 18 percent.

FPHC also earlier acquired Meralco Pension Fund’s 6.6 percent stake in the power utility giant for P8.3 billion.

Valued at around $1.8 billion, Meralco supplies power to about four million households and business establishments in Manila.

FPHC president and chief operating officer Elpidio L. Ibanez said with the implementation of the new performance-based regulation or PBR, “Meralco’s operations and performance will be more transparent, predictable and sustainable.”

FPHC is planning to raise around P5 billion through the issuance of perpetual preferred shares to repay debt and fund working capital requirements.

Proceeds may also be used by FPHC to increase its stakes in existing core businesses – Manila Electric Co., First Gen Corp. and Manila North Tollways Corp. – as well as to fund new strategic investments in infrastructure, manufacturing and property.

At present, FPHC holds a 66-percent stake and 34-percent stake in First Gen and MNTC, respectively.

FPHC earlier raised its capital stock to P32.1 billion from only P12.1 billion in preparation for its planned preferred share offering within the first half of this year.

The increase was intended to create 200 million preferred shares with a par value of P100 per share.

Out of the total increase, P5 billion has been subscribed while P2 billion has been paid for.